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Furlough changes from 1 July 2021: A REMINDER

The Coronavirus Job Retention Scheme (CJRS) will be in place until the end of September 2021. However, as the end of the scheme approaches, the level of government support will gradually reduce with the first change due to take effect from 1 July 2021.

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Published 28 June 2021

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Under the Coronavirus Job Retention Scheme (CJRS), employers who have furloughed employees can currently claim 80% of employees’ wages (up to a cap of £2,500 per employee per month) from the government.

Some employers may choose to top up employees’ wages above the 80% total cap at their own expense.

From Thursday 1 July 2021, employers will be required to contribute 10% of the 80% furlough pay for hours which are not worked. The government contribution will therefore be reduced to 70% of employees’ wages (up to a cap of £2,187.50) per month.

In August and September 2021, employers will be required to contribute 20% of the 80% furlough pay, with the government contribution reducing to 60% of employees’ wages (up to a cap of £1,875) per month.

Employers will continue to be responsible for employers’ National Insurance contributions and pension contributions until the scheme ends on 30 September 2021.

The government has produced a table setting out changes to the level of grant from 1 July 2021 which can be viewed here.

If you require advice or assistance regarding the CJRS or what to do when the scheme ends, please contact a member of our Employment Team who will be happy to help.

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Shorter Reads

Furlough changes from 1 July 2021: A REMINDER

The Coronavirus Job Retention Scheme (CJRS) will be in place until the end of September 2021. However, as the end of the scheme approaches, the level of government support will gradually reduce with the first change due to take effect from 1 July 2021.

Published 28 June 2021

Associated sectors / services

  • Employment law for employers

Authors

Under the Coronavirus Job Retention Scheme (CJRS), employers who have furloughed employees can currently claim 80% of employees’ wages (up to a cap of £2,500 per employee per month) from the government.

Some employers may choose to top up employees’ wages above the 80% total cap at their own expense.

From Thursday 1 July 2021, employers will be required to contribute 10% of the 80% furlough pay for hours which are not worked. The government contribution will therefore be reduced to 70% of employees’ wages (up to a cap of £2,187.50) per month.

In August and September 2021, employers will be required to contribute 20% of the 80% furlough pay, with the government contribution reducing to 60% of employees’ wages (up to a cap of £1,875) per month.

Employers will continue to be responsible for employers’ National Insurance contributions and pension contributions until the scheme ends on 30 September 2021.

The government has produced a table setting out changes to the level of grant from 1 July 2021 which can be viewed here.

If you require advice or assistance regarding the CJRS or what to do when the scheme ends, please contact a member of our Employment Team who will be happy to help.

Associated sectors / services

  • Employment law for employers

Authors

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