Employers need to be aware of the upcoming changes to the Coronavirus Job Retention Scheme (CJRS).
The scheme was brought in for employers to receive help with paying employees wages with grants from the government. These grants enabled employers to claim for up to 80% of an employees wages up to £2,500 per month, plus any employer National Insurance and pension contributions. The scheme will close on 31st October 2020.
What changed from 1st August?
From 1 August the scheme continued to pay 80% of wages up to £2,500 per month, but no longer funded employers’ National Insurance (NI) and pensions contributions. Employers now have to make these payments from their own resources for all employees, whether furloughed or not.
What's changing from 1st September?
From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours furloughed employees do not work. Employers will need to pay 10% of furloughed employees’ wages to make up 80% of their total wages up to a cap of £2,500. The wage cap is proportional to the hours not worked. Employers will also continue to pay furloughed employees’ NI and pension contributions.
More information on the Coronavirus job retention scheme can be found here: https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme