From 1 July, the government’s Coronavirus Job Retention Scheme will be ending.
According to data from the Institute for Fiscal Studies, 3.4 million jobs are still on furlough at the end April. This means that thousands of employers will be affected by the changes to the furlough program.
The government has paid 80% of salaries since March (up to a maximum contribution of PS2,500 per monthly) and employers have only to pay employer National Insurance or pension contributions.
The government will pay 70% of furloughed employees’ salaries starting in July. Employers must pay 10% of that amount. Employers will be required to pay 20% in August and September. The government will take up 60%. Furloughed workers will still receive 80% of their wages, including the employer contribution.
According to the IFS however, employers will have to pay more for keeping staff members on the scheme. This could put jobs at risk. Employers will have to pay more to keep furloughed employees who earn PS20,000 annually, compared to those who earned PS155 per month in June and PS322 in July. The cost of keeping them on the scheme will increase to PS489 per monthly in August and September.
Further information about changes to the CJRS is available at GOV.UK CJRS.
Internet link: IFS publication