In the Spring Budget, the Government has announced today (3 March 2021) that the furlough scheme, which was due to finish at the end of April (and which we will continue to refer to as the ‘Extended CJRS’), will be extended until 30 September.
For employees, there will be no changes to the terms of the Extended CJRS: furloughed employees will continue to receive up to 80% of their pay for hours not worked, up to a maximum of £2,500 per month. As before, employers will continue to pay employee pension and National Insurance contributions.
The level of Government support under the Extended CJRS will remain the same until 30 June 2021, with employers able to claim up to 80% of pay for hours not worked, subject to the monthly cap of £2,500. As businesses start to gradually re-open in line with the Government’s recently announced “roadmap to easing restrictions”, employers will be required to contribute (alongside the Government) on a tapered basis towards employees’ furlough pay. During July, the Government has indicated that it will contribute 70% and employers will be required to contribute 10% of pay for hours not worked, subject to the monthly cap of £2,500. During August and September, the Government has indicated that it will pay 60% and employers 20%, subject to the monthly cap of £2,500.
The next step for employers (where relevant) will be to notify their staff that they are aware of this extension to the scheme, making clear that further information will be communicated to applicable staff in due course and, where appropriate, updated furlough letters will be provided. In particular, employers will need to review the letters they have sent to furloughed staff in the past to see whether those letters refer to a specific end date for furlough, or state more generally that furlough will continue until the end of the scheme.
The extension to furlough is part of a three-point plan, which the Government states is to “provide support for jobs and businesses as we emerge from the pandemic and forge a path to recovery”. Accordingly, a further package of measures will also be made available to support those impacted by the coronavirus pandemic and to encourage future growth, including increasing the incentives for businesses to hire new apprentices to £3,000 and an increase in the National Living Wage to £8.91 per hour from April 2021.
How we can help
We will be updating our our FAQs on Furlough under the Extension to the Coronavirus Job Retention Scheme and template furlough letters in relation to this extension, when more detailed Government guidance is available. We will make these available on the Make UK website as soon as we can.
For further information on the Extended CJRS please see our FAQs on Furlough under the Extension to the Coronavirus Job Retention Scheme.