From 1 September 2020, the government is changing the CJRS. The changes mean that employers will need to fund 10% of furloughed employees’ usual wages for the hours they’re not working and continue to pay their National Insurance (NI) and pension contributions. These contributions won’t be covered by future grants.
Previously, employers have been able to claim back 80% of an employee’s usual wage, up to a cap of £2,500 per employer. However, from 1 September this is reduced to 70% of usual wages, up to a cap of £2,187.50 per month for the hours furloughed employees aren’t working.
Although the claim percentage has reduced, employers will pay NI and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for the time they’re furloughed.
From August 2020, employers have had to cover the cost of furloughed employees’ NI and pension contributions from their own funds. This will continue throughout September and October, until the scheme ends on 31 October 2020.
You can find out more about the changes to the scheme here.
The government is also offering free webinars to help employers understand the latest updates to the CJRS. You can find out more here.