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COVID-19 Job Retention Scheme Important Reminders

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The final date by which an employer can furlough an employee for the first time and be eligible for the Government’s Coronavirus Job Retention Scheme will be this coming Wednesday, 10 June.

This is in order for a full three-week furlough period to be completed by the time the scheme closes to new entrants (employers and employees) on 30 June.

Reminder of upcoming CJRS changes

From 1 July

  • Claims will be restricted to employers that have already used the scheme and previously furloughed employees.
  • Individual employers will have the flexibility to decide the hours and shift patterns their employees will work on their return, with the scheme covering the remaining normal hours that they are furloughed. This will allow for part-time working to suit the needs of the business.
  • The maximum number of employees that can be claimed for in any period cannot be higher than the maximum number claimed for in a previous period.

Grants that can be claimed

  • In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer’s National Insurance (NICs) and pension contributions. Employers are not required to pay anything.
  • From August 2020 the level of grant provided through the job retention scheme will be tapered, with employers’ contributions increasing to reflect the Government’s encouragement for people to be returning to work:
    • In August, employers will be required to pay employer NICs and pension contributions. Government analysis indicates that for the average claim this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
    • In September, the government’s contribution to furlough wages will fall to 70%, up to a cap of £2,187.50. Employers will pay employers NICs, pension contributions and 10% of wages to make up 80% total, up to a cap of £2,500.
    • In October, the government furlough contribution falls to 60% of wages up to a cap of £1,875. Employers will pay employer NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

The scheme will cease at the end of October 2020.

Further detail around the above changes to the scheme are being announced at the end of this week. We will update you once this information is available. If you have any questions, please speak to your usual BHP contact.