Coronavirus Furlough Scheme Begins to Wind Down
As of today, the UK government will pay only 70% of furloughed workers’ wages, with employers paying 10%.
On 1 September, the Coronavirus Job Retention Scheme (CJRS) entered its final phase.
The scheme, first implemented in March, enabled UK companies to place employees on furlough, meaning they would not work but would have 80% of their salary reimbursed by the government, up to £2,500 per month. The government would also pay National Insurance and pension contributions, though this has been shifted back to employers as of 1 August.
Now, the proportion of wages paid has also shifted, and employers will be expected to pay 10% of furloughed employees’ wages while the government accounts for 70% — up to a cap of £2,187.50 per month.
New legislation has also ensured that employees who are made redundant while on furlough will be entitled to redundancy pay equal to their normal working pay rather than the proportion of wages they have received while on furlough.
“We urge employers to do everything they can to avoid making redundancies, but where this is unavoidable, it is important that employees receive the payments they are rightly entitled to,” business secretary Alok Sharma said in a statement.
While originally planned to end earlier in the year, the CJRS will only be fully phased out by the end of October. During that month, the government will pay 60% of employees’ wages, with employers making up 20%.
Chancellor Rishi Sunak has repeatedly ruled out a further extension to the CJRS, saying that it would be “wrong to keep people trapped” in a situation where they would have no job to return to.