The Coronavirus Job Retention Scheme (CJRS) has allowed many businesses to continue their operations through one of the most unprecedented global events in history.
Since 20 April, the CJRS allowed businesses to claim 80% of the wage costs of employees who were ‘furloughed’, capped at £2,500 per month per employee plus national insurance contributions. Further to our previous updates on the CJRS, the government has introduced phased changes to CJRS as the lockdown eases.
Since 1 August 2020, employers were required to pay the employee national insurance and pension contributions towards the 80% furlough pay from the government. This was further amended so that from 1 September 2020 there would be a 10% furlough pay contribution, (in addition to the national insurance contributions and pension contributions) from the employer, whilst the government contributions are reduced to 70% furlough pay subject to the cap.
The changes will continue into October 2020 when there will be an increase in employers’ contributions to furloughed employees’ pay from 10% to 20%, capped at £625. The government will pay 60% of employees’ pay, capped at £1,875. The national insurance and pension contributions on the furlough pay will remain to be paid by the employer.
You can view the full guidance on the Gov.uk website by clicking here.
These increasing costs are likely to have a more noticeable impact on businesses and in particular their cash-flow.
If your business needs advice on managing employees and the CJRS then please feel free to contact us to speak to one of our specialist employment solicitors by calling 0115 9 100 200 or click here to send an email.
Posted on September 15, 2020