Coronavirus Job Retention Scheme (CJRS): Countdown to its phase out20 May 2021 // Insights
Head of Employment Helen Crossland reminds employers that 1 July 2021 marks the start of the phasing out of the furlough scheme.
As confirmed in our update of 3 March 2021 here, the CJRS is due to end on 30 September 2021. May and June 2021 are the final months for which the Government will pay furloughed employees 80% of wages, capped at £2,500 a month, and where employers need not contribute anything towards hours not worked.
The current level of grant available to employers under the CJRS will begin to taper down on 1 July 2021 and from that date, employers will be required to resume paying wages for a proportion of employees’ hours not worked.
The table below shows the level of Government contribution available in the remaining months of the CJRS, the required employer contributions and the amount that an employee will receive per month, where furloughed 100% of the time.
Employees can continue to be placed on flexible/part time furlough until the CJRS expires. Businesses can also choose to top up employees’ wages above the relevant cap for any hours not worked at their own expense.
In the event an employee is given notice of redundancy or notice that their employment is to terminate while on furlough, it is advisable to pay any notice or holiday pay due at the employee’s full basic rate of pay. Any redundancy payment should also be calculated using the employee’s normal rate of pay, rather than their furloughed rate.
Termination payments to furloughed employees, including notice, holiday and redundancy pay, must be borne in full by the employer and cannot be claimed under the CJRS.
Should you have any queries on the above or require any employment related advice, please contact Helen Crossland at firstname.lastname@example.org or on 020 7725 8034 or Fiona Mendel at email@example.com or on 020 7725 8033.