Payroll Legislation

The Coronavirus Job Retention Scheme: What's the Latest?

Legislation

The Coronavirus Job Retention Scheme: What's the Latest?

Due Date

1 March 2020

Summary

On Friday 20 March 2020, Chancellor Rishi Sunak set out a package of temporary measures to support UK businesses through this period of disruption caused by the COVID-19 / coronavirus outbreak. One of those packages announced was the Job Retention Scheme.

Initially running until the end of May and then June, on 12 May 2020, the Chancellor extended the scheme further. The scheme will now run for eight months until the end of October, with claims backdated to 1 March 2020.

About the JRS

On Friday 29 May 2020, the Chancellor set out more details on how the Coronavirus Job Retention Scheme will continue to support jobs and business as people return to work.

This included detail of new flexibilities allowing employees to work part time while still being eligible for furlough grants, and the introduction of employer contributions.

The initial scheme ended on 30 June 2020 and the new scheme opened on 1 July 2020.

Key Points About the Scheme

• The scheme closed to new entrants on the 30 June. This means that employees must have been furloughed on or before the 10 June if they are to be furloughed on or after 1 July.
• Furlough claims for periods up to and including 30 June must be made by 31 July.
• From 1 July the minimum period of a claim is one week, claim periods will no longer be able to overlap months and employees will be allowed to work part time for their employer while furloughed. The employer will be able to claim for the normal hours not worked. This had originally been scheduled to start on 1 August.
• From 1 August employers will no longer be able to claim Employer’s NI or Pension contributions.
• From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours furloughed employees do not work. Employers will need to pay 10% of furloughed employees’ wages to make up 80% of their total wages up to a cap of £2,500. The wage cap is proportional to the hours not worked.
• From 1 October employers will only be able to claim 60% of normal pay but will have to pay employees 80%, funding the extra 20% themselves.

This legislation is current and was updated on 21 September 2020.

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