The Government’s Coronavirus Job Retention Scheme (CJRS), also known as the furlough scheme, was recently extended until October, with no changes until August. But what happens next with the scheme?
Currently, businesses can place employees on furlough leave, with the Government grant covering 80 per cent of the workers’ wages up to a maximum of £2,500 per month.
This system will remain in place until the end of July, but from 1 August, the scheme will begin to be re-shaped. The CJRS is set to become more flexible, with more flexible and part-time furloughing being permitted (this is currently not allowed), and employers will be required to share the cost.
The Government has not yet clarified the exact guidelines for employers in terms of what the expectations will be over employer contribution, with further guidance set to be provided at the end of the month.
With more than 8.4 million people placed on furlough, the Government is facing a financial burden and is now looking at how to get more people back to work, through a variety of measures.
The Government is looking at options including reducing their contribution to employees’ wages to 60 per cent from August, with businesses paying 20 per cent to ensure the 80 per cent contribution remains.
There may also be a gradual reduction of the Government’s contribution every month until October, with employers’ contributions increasing each month, as the Government looks to wind up the scheme at the end of October.
Businesses are now being urged to ensure that they are prepared to make higher contributions once the Government reduces its subsidy, and to consider all potential options, ensuring to communicate with their staff.
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