It has been confirmed by chancellor Rishi Sunak that from July to October the government’s job retention scheme (JRS)will be changed.
From July 1st, companies will have the option to bring furloughed staff back into work on a part time basis. The staff will continue to receive 80% of their salary until the scheme has finished in October. Over the course of this time employers will now be expected to gradually increase their contribution to the salaries of their furloughed staff.
During August, the taxpayer’s contribution will continue to be 80%, but employers are now expected to pay national insurance and any employer pension contributions, this applies to companies that are in administration. If this is not a possibility, then it is expected for the company to repay the money back to the HMRC. This rule also applies in relation to NICs and pension contributions that companies claim regarding their employees. The full amount claimed must be paid or the company will be forced to repay the money back to HMRC.
From September, employers will also now be asked to pay 10% towards people’s wages, this will continue to rise to 20% in October. The scheme is predicted to end on October 31st, at this time the company will have the responsibility to determine whether employees can return their regular hours of work or whether it is necessary to reduce their hours. A termination of their employment could also be taken into consideration – in this circumstance, the normal redundancy rules apply to furloughed staff.
The Job Retention Scheme closed new entrants on the June 30th, with the June 10th being the last date for an employee to be put on furlough for the first time.
Dame Carolyn Fairbairn, Director-General at the Confederation of British Industry, said:
‘Introducing part-time furloughing as more stores and factories start to open will help employees to return to work gradually and safely. Many more businesses will feel supported during this vital restart phase.’
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