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Covering the phasing in of employer contribution and flexible working

On Friday 29 May 2020, the Chancellor set out more details on how the Coronavirus Job Retention Scheme will operate over the summer and autumn following the prior announcement of an extension of the scheme to the end of October 2020.

Employer Contribution

For June and July the government will continue to pay 80% of people’s salaries, subject to the cap of £2,500 per month. From August 2020, the level of government grant provided through the scheme will be tapered. Employers will be asked to contribute a share, but furloughed employees will continue to receive 80% of salary (subject to the cap) covering the time they are unable to work.

The following will apply for the period people are furloughed:

  • June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions.
  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
  • October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

If employee earnings are below the thresholds where employer NICs and automatic enrolment pension contributions are due, no employer contribution would be required for payments to these furloughed employees in August.

Flexible Working

From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced. Further guidance on flexible furloughing and how employers should calculate claims will be published by 12 June.

Closure to new entrants

Claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees. The scheme closes to new entrants from 30 June 2020. A new entrant will therefore have to commence furlough by 10 June, in order to complete a three-week furlough by 30 June 2020.

https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps

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