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COVID-19: Employment Law Update 12: The Coronavirus Job Retention Scheme Extended


The Coronavirus Job Retention Scheme Extended

The Chancellor announced in the Budget on 3 March 2021 that the Government was extending the Coronavirus Job Retention Scheme, also known as the Furlough Scheme, until 30 September 2021.

Up until 1 July 2021 the Government will continue to pay 80% of employees’ wages, up to a maximum of £2,500 per month under the Coronavirus Job Retention Scheme.  However, from the 1 July 2021 the scheme will be tapered as follows:-

  • From 1 July 2021 the Government will pay 70% of employees’ wages and employers will have to pay 10% of the employees’ wages up to a maximum of £2,500 per month.
  • From 1 August 2021 the Government will pay 60% of employees’ wages and employers will have to pay 20% of the employees’ wages up to a maximum of £2,500 per month.
  • From 1 September 2021 the Government will pay 60% of employees’ wages and employers will have to pay 20% of the employees’ wages up to a maximum of £2,500 per month.

Employers would still need to pay their employees’ National Insurance Contributions and pension contributions under this extended scheme.

Employees are still able to be placed on flexible furlough throughout this period meaning employees can work part-time and receive a furlough grant for the hours they do not work.

Employers are able to claim the furlough grant for any new employees who joined their workforce from 1 October 2020 to 2 March 2021, however they would need to wait until May 2021 until they are able to furlough these new employees.  It is therefore important for employers to be aware they are unable to place any new employees who join their workforce after 3 March 2021 on furlough.

Disclaimer – The above facts are accurate as of 15:00 on 12 March 2021.

For advice on this, or any other employment matter, contact the employment team on 01905 723 561 or email: Guy.salter@smesolicitors.co.uk or Sonia.ali@smesolicitors.co.uk

 

Added: 15 Mar 2021 11:29


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