What is changing to the job retention scheme?

job retention scheme

  • The Job retention Scheme will close to new entrants from 30 June 2020. If you haven’t furloughed employees yet and may wish to do so post 30 June 2020, you will need to furlough them soon to ensure that they are furloughed for a full 3 week period prior to 30 June 2020 (therefore, the final date to furlough before 30 June 2020 is 10 June 2020). Employers have until 31 July 2020 to make any claims in respect of the period to 30 June 2020.
  • From 1 July 2020, the government are introducing ‘furloughed hours employees’. With this, you can bring back staff for any period of time and for any shift pattern, but still claim under the Scheme for the normal hours not worked. When claiming under the Scheme for furloughed hours employees, you will need to report and claim for a minimum period of 1 week.
  • The government’s contributions are also changing:
    • For June and July 2020, everything remains as normal.
    • From August 2020, whilst the Scheme will continue to cover 80% of wages, employers will now need to pay employer National Insurance and pension contributions up to the usual cap of £2,500. For the average claim, this represents 5% of the gross employment costs had the worker not been furloughed.
    • From September 2020, the Scheme will cover 70% of wages, up to a lower cap of £2,187.50. Employers will now need to pay employer National Insurance and pension contributions, plus 10% of wages up to the cap of £2,500. For the average claim, this represents 14% of the gross employment costs had the worker not been furloughed.
    • From October 2020, the Scheme will cover 60% of wages, up to a lower cap of £1,875. Employers will now need to pay employer National Insurance and pension contributions, plus 20% of wages up to the cap of £2,500. For the average claim, this represents 23% of the gross employment costs had the worker not been furloughed.
  • The Scheme will end on 31 October 2020.