From today, changes to the Coronavirus Job Retention Scheme (“furlough scheme”) come into effect which see the government reduce its contribution and employers required to increase their contribution.

The changes will not affect the amount that employees receive for the hours they are furloughed (which will continue to be 80% of their wages, capped at £2,500). 

From 1 July 2021, Government contributions are reducing to 70% of wages (capped at £2,187.50 per month) for the hours that employees are furloughed. The balance of 10% (up to £312.50) will have to be paid by employers.

The next stage of changes to contributions will run from 1 August 2021 until the furlough scheme is due to end on 30 September 2021. During that period, Government contributions will reduce to 60% of wages (capped at £1,875 per month) for the hours that employees are furloughed. The balance of 20% (up to £625) will have to be paid by the employer.

In their recent article Changes to the CJRS – A Time to Reflect on Business Change? my colleagues, Christine Hart and Trishna Modessa- Parekh, wrote about these changes to the furlough scheme and its ultimate withdrawal and considered some of the potential impacts for employers. Please take a look at that article if you’d like to learn more.

If you would like advice on these changes and the winding down of the furlough scheme and the impact it might have on your organisation and employees, then please do get in touch with a member of our Employment team.

This article contains a general overview of information only. It does not constitute, and should not be relied upon, as legal advice. You should consult a suitably qualified lawyer on any specific legal problem or matter.