Member Article

Here’s what employers need to know about the latest furlough scheme extension

Designed to prevent mass redundancies during the COVID-19 pandemic, the Coronavirus Job Retention Scheme (CJRS) has been extended once again until 30 September 2021 and to prepare for this change, here’s what employers need to know.

As set out by the government, in its latest budget announcement, the CJRS or ‘furlough’ scheme will now be extended until the end of September 2021 to support eligible UK employers that are facing difficulties, to help them retain employees at this time.

From flexible furlough to changing government contributions, the HR experts at Breedon Consulting have compiled a list of important things that employers need to know about the extension.

Managing director of Breedon Consulting, Nicki Robson, said: “It’s positive news that the furlough scheme has been extended, which will be a huge contribution to companies as they start to build up again once restrictions start to ease, and means business owners have extra planning time.

“There are a number of changes to the government schemes, which will mean its decision time for a lot of companies, and many are seeking advice and exploring options in order to put plans in place.

“As a HR firm, we offered free advice from the start of the COVID-19 pandemic back in March 2020 and we are continuing to offer free 15-minute sessions to struggling businesses, highlighting options that may not have been thought of. Creativity is key and options such as sabbaticals and job-sharing arrangements may provide opportunities to retain talent, without the full costs previously associated with that.”

Here are four things employers need to know about the recent furlough scheme extension:

1.Government contribution is changing

Under the new plan, an employee’s 80% furloughed wage up to a maximum of £2,500 per month will continue to be covered entirely by the government until 30 June. From 1 July, the government will cover just 70% of an employee’s furloughed wage, up to £2,187.50 per month. Employers will then be expected to cover the remaining 10% to reach the required 80%. From 1 August, the government will only cover 60% of an employee’s furloughed wage, up to £1,875 per month, with employers expected to cover the remaining 20%. Employees need to have been on RTI submissions by 2 March 2021 to qualify.

2. Flexible furlough will continue

First introduced in July 2020, the flexible furlough scheme allows employers to bring back employees on a part-time basis, while still claiming a grant from the government. This scheme will continue under the spring budget announcement and employers will pay for any days worked, while the government contributes for the remainder.

3. Pension Contributions

The Department for Work and Pensions has confirmed that employers are still liable for minimum automatic enrolment employer pension contributions on behalf of their furloughed employees. Employers will also have to cover National Insurance contributions.

4.There is advice and support out there for businesses

For business owners with questions following this extension, it’s important to seek advice from HR professionals to ensure that eligibility for the scheme is considered and the right options are harnessed to support and safeguard companies for the future.

This was posted in Bdaily's Members' News section by Tamara Samuel .