Furlough – Here Comes The Summer!

With the last week finally showing glimpses of summer, vaccinations continuing to be administered at pace, along with further easement of restrictions, changes towards what employers are able to claim will change from July 2021.

The Coronavirus Job Retention Scheme (CJRS) will still allow employers to claim 80% of the employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to 30th June 2021.

From 1st July 2021, CJRS will cover 70% of employees’ usual wages for hours not worked, up to a cap of £2187.50, whilst from 1st August 2021 through to 30th September 2021, this will reduce to 60% of the employees’ usual wages up to cap of £1875.

Employers must continue to top up furloughed employees to 80% of their usual wages for the hours not worked, from 1st July onwards, to a cap of £2,500. This means, that from July 2021, employers will require to top up the employees pay by 10% and 20% for August and September themselves and not claim for this additional top up.

Employers can also top up wages above 80% if they elect to, but there is no statutory requirement to do this.

Employers must continue to pay the appropriate Employer National Insurance on the employees’ pay for the period and Employer pension contributions must continue to be paid at the correct value, in line with the appropriate pension scheme that is in place. These costs will continue to be met solely by the Employer.

The table below shows a summary of the changes that will take place over the next 3 months:

	June	July	August	September
Government contribution: wages	80% up to £2,500	70% up to £2,187.50	60% up to £1,875	60% up to £1,875
Employer contribution: wages	£0	10% up to £312.50	20% up to £625	20% up to £625
Employee receives	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month
Employer contribution: Employer NICS and Pension Contributions	Yes	Yes	Yes	Yes
Government contribution: Employer NIC and Pension Contributions	No	No	No	No

Furlough Reference Period

As a reminder, employees have one of three reference dates to use when calculating Furlough pay, i.e. this will not change even if their contractual pay has gone up or down since:

• For employees on an FPS by 19th March 2020, the last pay period before this date
• For employees on an FPS between 20th March 2020 and 30th October 2020, the last pay period before 30th October 2020
• For employees on an FPS between 31st October 2020 and 2nd March 2021, the last pay period before 2nd March 2021

Alongside this, pay for hours worked must, of course, be based on current contractual pay and for employees on flexi furlough, employers must ensure that the calculation of “usual” hours is up to and including the last day of flexi furlough, not the whole pay period. If the employee returns to work.

Any future changes in regards to the CJRS will be communicated as they become available.

For further information, or if you have any questions, please contact Brian Robb or your usual Anderson Anderson & Brown contact.