August update on the Job Retention Scheme

From 1 August employers will need to start sharing the cost of the Government’s Job Retention Scheme as they begin to wind down the initiative. More than 9 million workers have benefited from the support at a cost of over £31bn. The scheme is due to end on 31 October 2020.

The new changes will see the Government continue to pay 80% of wages (up to £2,500) for the hours the employee is on furlough. Employers will then pay employees for the hours they work and pay employer National Insurance Contributions and pension contributions for the hours the employee is on furlough. From the 1 September, the Government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough, employers will then pay employees the hours worked ensuring they pay at least 80% of their wages (again capped at £2,500), as well as paying employer National Insurance Contributions and pension contributions.

Then from 1 October the Government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will continue to pay employer National Insurance Contributions and pension contributions and top up their wages to ensure they receive 80% of their wages (capped at £2,500).

Sean Daniel, Managing Director said, “The Government has provided some much-needed support at a difficult time but inevitably the Job Retention Scheme needs to come to an end”.