The end of furlough is in sight.
Today marks the very visible beginning of the end for the Coronavirus Job Retention (CJR) Scheme.
From today, 1st September 2020, employers have to contribute at least 10% of salary for those on the furlough scheme. This adds to the payments of employer National Insurance Contributions (NICs) and employer pension contributions, a change introduced on 1 August.
The government contribution will fall from 80% to 70% of an employee’s wages up to a cap of £2,187.50 per month for the hours the employee is on furlough.
That means the cost of retaining employees on the furlough scheme becomes much more noticeable for employers.
The scheme is scheduled to close on 31st October and there are concerns that its end will trigger widespread redundancies. In response to this, the government has introduced a law requiring businesses to calculate redundancy payments on full earnings, not reduced furlough wages. In addition, a Job Retention Bonus has also been introduced to encourage employers to retain staff who have been brought back to work from furlough. Payments of £1,000 will be made for each returned furloughed employee who remains employed from November through to the end of January 2021.
Your business may be considering redundancies. THSP work with many customers to arrange COT3 agreements by helping them manage this process. We can help you. Call us on 03456 122144 and speak to one of our employment lawyers today.