The Chancellor announced on 29 May the changes to the Coronavirus Job Retention Scheme. This will of course have an impact for those employers who have furloughed employees under the Scheme.

The Government has produced a factsheet outlining the changes with more detailed guidance to follow.

The main points to note are:

• June and July: The government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and employer auto enrolment pension contributions.
• August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension.
• 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.
• The Scheme will be closed for employees  not furloughed as of 10 June.
• The Scheme will be amended to allow for a flexible furlough which, from 1 July, will see employees being able to do some work whilst still furloughed. The Chancellor gave an example of a full-time employee who usually works 5 days a week. They could return to work 2 days a week. The employer would pay for those two days worked with the remaining 3 days not being worked covered under the furlough scheme.
• The Scheme will close at the end of October.

With the changes to the Scheme meaning that employers will have to pay an increased cost for employees that they continue to furlough from 1 August 2020, employers are likely to want to review their options and alternatives to furlough.

If you need any more details on the furlough scheme, including the implications of the changes to the Scheme, please contact Matt Jenkin.