Following on from our recent article the government have announced further changes to the Job Retention Scheme which is due to close on 31st October 2020.
From 1st August 2020, the level of grant was reduced each month. In order to be eligible for the grant, employers must pay furloughed employees at least 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
A timetable for changes to the scheme from 1st September 2020 is set out below:
Please note, wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual working hours.
Employers will continue to be able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
The table below highlights the government contribution, required employer contribution and amount the employee receives where the employee is furloughed for 100% of the time (wage caps are proportional to the hours not worked);
July 2020 | August 2020 | September 2020 | October 2020 | |
Government contribution: Employer NICs and pension | Yes | No | No | No |
Government contribution: Wages | 80% capped at £2,500 | 80% capped at £2,500 | 70% capped at £2,187.50 | 60% capped at £1,875 |
Employer contribution: Employer NICs and pension | No | Yes | Yes | Yes |
Employer contribution: Wages | - | - | 10% capped at £312.50 | 20% capped at £625.00 |
Employee receives | 80% capped at £2,500 per month | 80% capped at £2,500 per month | 80% capped at £2,500 per month | 80% capped at £2,500 per month |
Should you have any queries or questions in respect of the above, please reach out to your usual Arnold Hill & Co contact, call our mainline on 0207 306 9100 or email our general address – info@arnoldhill.co.uk
The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.