Job Retention Scheme: new deadlines for employers
Coodes Solicitors employment lawyer Philip Sayers outlines the latest Government guidance on the Job Retention Scheme, which includes six important deadlines for employers.
Updates to the Coronavirus Job Retention Scheme were announced by Chancellor Rishi Sunak at the Government briefing on Friday 29 May. The Government guidance has now been updated and includes some important deadlines for employers.
Over the coming four months, the scheme, which allows employers to place staff on furloughed leave during the coronavirus crisis, will be gradually wound down. Employers will have to review the changes and assess what steps, if any, they need to take now to prepare for the Government contributions being reduced.
In a nutshell, these are the key points for employers to note:
1. No new employees can be furloughed after 30 June
From 30 June employers will not be able to furlough anyone who has not already been on at least one period of furloughed leave by that date. As each period of furlough must last at least three weeks, employers will need to make decisions on or before 10 June 2020.
2. Part-time working will be permitted from 1 July
Employers will be able to place staff on a part-time working, part-time furloughed basis from 1 July. While the Government will cover their contribution towards the furloughed leave, employers will have to pay the salaries for the hours that people are working. The Government has promised more detail on this on 12 June.
3. From 1 August, employers will must pay National Insurance and pension contributions
The HMRC grant currently covers the employer’s National Insurance contributions and minimum automatic enrolment pension contributions for any employees on furloughed leave. From 1 August, employers will have to meet these costs themselves.
4. The Government contribution will be reduced in September
From 1 September, the Government contribution towards the salary of furloughed employees will drop to 70 percent of wages, up to £2,190 a month. Employers will have to provide at least 10 percent of the employee’s usual pay, so that they can receive a minimum of 80 percent of their salary.
5. A further reduction in Government contributions from October
From 1 October, the Government contribution will be reduced again, to 60 percent of wages and up to £1,875 a month. The employer will then have to start paying at least 20 percent of the furloughed employees’ salaries.
6. The end of the Job Retention Scheme
The Government has confirmed that the Coronavirus Job Retention Scheme will close completely on 31 October. Employers who may need to make redundancies following the closure of the scheme would be well advised to plan in advance due to the need to comply with notice periods and potentially, depending on the number of redundancies planned, minimum consultation periods.