Employers to contribute towards furlough costs from August

The Chancellor has just announced major changes to the Coronavirus Job Retention Scheme (CJRS). There’s good news and bad - how might you be affected?

Employer contribution. Under the CJRS currently, you can claim 80% of a furloughed employee’s salary up to £2,500 per month plus employers' NI and the minimum auto-enrolment pension contribution.  From August you will need to start contributing towards the cost of furloughing. This will be on a sliding scale as follows:

  • From August, you will have to pay the employers' NI and the minimum auto-enrolment pension contribution
  • From September, you will also have to contribute 10% of furlough pay. This means that you will only be able to claim 70% of furlough pay and you must make up the difference so that your furloughed employees continue to receive the 80% minimum.
  • From October, this contribution increases to 20% of furlough pay. This means that you will only be able to claim 60% of furlough pay and you must make up the difference so that your furloughed employees continue to receive the 80% minimum.

Flexible furloughing from July. From July, you can ask furloughed employees to work on a part-time basis while remaining on furlough for the rest of the time. This is new, before this date furloughed employees were prohibited from doing any work for you.

Access to the CJRS. From July, the CJRS will only be available to employers that have previously used it in respect of employees they have previously furloughed. The CJRS will therefore close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June. This means that the final date by which you can furlough an employee for the first time will be 10 June, in order for the three-week furlough period to be completed by 30 June. 

End date. The Chancellor has confirmed that the CJRS will close on 31 October.