1st June 2020 – Update to the Coronavirus Job Retention Scheme

End of the CJRS

On Friday the Chancellor announced that the Coronavirus Job Retention Scheme will close at the end of October. He also provided some detail of how the Scheme will be wound down in the coming months. We have set out the key changes below.

• Employers will have until the 10th June 2020 to place employees on furlough leave. Employees will not be able to be placed on furlough after this date.
• From 1st July, furloughed employees will be able to return to work part-time, whilst remaining furloughed part-time. We understand that businesses will decide what time an employee spends furloughed/working.
• From 1st August, employers will have to pay employees’ national insurance and pension contributions. These will no longer be able to be claimed through the Scheme.
• From 1st September, the Scheme will only cover 70% of salary, which is up to a maximum of £2,190. Employers will still need to pay employees at least 80% of their pay.
• From 1st October, the Scheme will only cover 60% of salary, which is up to a maximum of £1,875. As before, employers will still need to pay employees at least 80% of their pay.
• The Coronavirus Job Retention Scheme will close on 31st October 2020.

It will be useful for employers to know broadly how the Scheme will be winding down. However, we expect that there will be a Treasury Direction published in due course, along with further Employer’s Guidance from HMRC, which will give effect to these changes and provide us with the detail of how this will work in practice.