Employers Must Pay More Towards Furloughed Staff from 1 July 2021
Until 30 June 2021, the UK government will continue contributing 80% of an employee’s wages for furloughed employees, capped at £2,500, but from 1 July this contribution will reduce on a sliding scale until the scheme ends at the end of September.
For July, employers will only be able to claim 70% of wages for furloughed staff, up to a maximum of £2,187.50
For August and September, employers will only be able to claim 60% of wages for furloughed staff, up to a maximum of £1,875
This means that employers who intend to continue to rely on the furlough scheme will need to make up the difference between what they can claim and what they are required to pay furloughed employees (80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough) if they want to remain eligible for the CJRS grant.
With many employers still not able to fully reopen and many still struggling to generate revenue to cover existing operating cost, this additional uplift in costs may cause them to reconsider their position.
Here, we previously considered the implications for Employers due to the delay in the easing of lockdown restrictions and Redundancy and the impact of COVID-19