Please note: The information contained in this article is correct as of 28/06/21. Due to the ongoing nature of the coronavirus pandemic, all guidance is subject to change and as such, we would always advise you speak to a solicitor for specific advice.
The Coronavirus Job Retention Scheme (CJRS), now more commonly referred to as the furlough scheme, has been in place in one form or another since March 2020.
In his budget back in March 2021, Chancellor Rishi Sunak announced that the furlough scheme would be extended to the end of September 2021 but will begin to wind down the level of support offered to employers from the 1st of July.
How Does the Furlough Scheme Change in July?
From 1st July 2021, the government will still be subsidising the wages of furloughed employees but the percentage provided will drop from 80% to 70% of a worker’s salary, up to a maximum of £2,187.50. Employers are then required to contribute 10% towards the wages of a furloughed employee.
What Are the Planned Changes After That?
If the government’s current plans remain on track (which, as we know by now, isn’t always the case), the next change to the furlough scheme will come on the 1st of August when the government’s contribution will drop once again, this time to 60% and an employer’s required contribution will increase to 20%.
What About Businesses Which Have Been Unable to Open?
While the furlough scheme starts to wind down from 1st July, delays to the government’s roadmap mean there are still a number of businesses, such as nightclubs, which are forced to remain closed. As it stands, the government has announced no extra support for those businesses and it remains to be seen whether they have the funds available to contribute the required 10% or whether they will be forced to make redundancies or restructure.
Legal Advice on the Furlough Scheme
If you are an employer or employee looking for advice on the furlough scheme including your rights and responsibilities, our employment law specialists are on hand to answer any questions you may have. We can also advise on any related matters including redundancy and restructuring. Contact the team today on 0845 287 0939 or send your enquiry through our online contact form and someone will get in touch with you.