The Coronavirus Job Retention Scheme (CJRS) is scheduled to close on 30 September 2021. In anticipation of this closure, the government has once again decided that the level of grant received under the scheme will gradually be reduced. Employers may top up salary to 100% at their discretion however topping up to 80% will be mandatory.
This reduction shall start from 1 July at which point HMRC will reimburse employers for 70% of an employee’s earnings for unworked hours (up to monthly cap of £2,187.50). Employers will then be responsible for topping up the remaining 10% (up to a monthly maximum of £312.50).
From 1 August the grant shall further be reduced to up to 60% of earnings for unworked hours (up to a monthly cap of £1,875). Employers will then be required to top up 20% of salary, up to a maximum of £625. This reduction shall continue into September.
All current rules including those in respect of eligibility, the calculation of claims and the taking of annual leave will be unchanged. Employers who still have employees on furlough should begin to consider arrangements for annual leave if they have not done so already. Whilst furloughed employees continue to accrue leave at the usual rate, many may have also carried over leave from the previous year.
Employers may have some employees with a large amount of accrued but untaken leave, or a number of employees who might seek to take leave around the same time. Both of these situations pose strategic and financial problems for businesses, we therefore encourage employers to give notice to employees to take some annual leave whilst they remain on furlough. Any period of annual leave taken whilst on furlough must be paid at full contractual salary, as such employers will be obligated to top up employee salary, however they can still make use of the CJRS to cover some of the employees’ earnings.
Please contact us. if you have any questions about the CRJS scheme or if you would like advice on commencing a redundancy process.