The furlough scheme through the CJRS is changing from July 2021.
CJRS was introduced in response to the COVID-19 Pandemic in 2020, aiming to ensure employers could keep employees in jobs whilst they were unable to work.
The scheme has benefitted countless organisations across the UK, with an employee peak of 9.6 million between March and June 2020.
The scheme has been extended to 30th September 2021, although from 1st July 2021, there are some changes coming in to place. Over the coming months, the scheme will begin to shrink, and employees will be expected to return to work after 30th September 2021 when the scheme closes.
We’ve summarised the upcoming changes below, including key dates for the diary, alongside some key considerations to keep the transition from furlough back to work smooth for both employers and employees.
What’s changing with furlough?
From 1st July 2021, the level of grant will be reduced and you will be asked to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.
Moreover, from 1st July, employers will be required to make employer contributions to employees’ hours not worked for employees to receive the full 80% of their salary.
Previously employers only had to contribute to National Insurance and Pension contributions. Employers must therefore be aware of the additional cost to them, and consider the business case in bringing certain employees off furlough to benefit from their capabilities.
As the scheme continues to come to an end, the contribution from employers will increase across the coming months, whilst the government will begin paying less.
The table below highlights the upcoming changes, including what is changing on the 1st of each month.
|Government contribution: wages for hours not worked||80% up to £2,500||80% up to £2,500||70% up to £2,187.50||60% up to £1,875||60% up to £1,875|
|Employer contribution: employer National Insurance contributions and pension contributions||Yes||Yes||Yes||Yes||Yes|
|Employer contribution wages for hours not worked||No||No||10% up to £312.50||20% up to £625||20% up to £625|
|For hours not worked employee receives||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month|
What your organisation needs to consider.
With furlough ending, there are two primary options for employers – bring employees back or let employees go through redundancy.
Here are some of our key recommendations when bringing employees back to work:
- Timing is key. Employers must ensure they give due notice, and ensure that employees return at a time when it is safe. Risk assessments and Health and Safety reviews and training must be conducted to ensure employees are returning to work in safe conditions.
- Consider whether some of your employees may not be able to return. Certain employees may have pre-existing health conditions, be carers or may not be ready to return. Open a conversation with your employees and see how they are feeling about the return.
- What capabilities does your team currently need as a priority? Some employees’ roles may be required more than others, and you will need to prioritise what is best for the business.
- Do all employees need to come back at the same time? Start critical pathways and consider what employees you need back first, setting indicative dates for return. Strategise for an end goal date to have all employees back, and consider the implications at each stage of return. This will allow you to set dates for training, budget more effectively and understand who will need furlough claims each month, and who will not.
- Consider options outside of redundancy. Reducing hours or a review of contract may be a way to retain talent in the organisation. This will be beneficial for cash flow, and as the business reopens and cash inflows increase, it may be possible for the employee to return on a full time basis if they so desire.
- Flexible working is here to stay. Ensure you have new policies in place if remote working is a reality for your business model. Start conversations with employees to discuss new working patterns and behaviour, ensuring their views are listened to and heard.
- Thank your employees. It has been a tough process for us all, but no more than those who have been furloughed. Thank your employees for their patience and loyalty to your organisation, and ensure that they understand they are appreciated and valued.
These are just a range of considerations when approaching the end of furlough. Every organisation is different and unique, and so has different challenges. What may work for one business will not work for another. We would advise carefully considering your approach, and perhaps seeking expert advice where necessary to ease any concerns or worries.
VIable Corporate Services offer HR Advisory and Payroll services to businesses. Throughout the last year, we have worked with our partners to ensure furlough payments and claims are effectively managed, and staff wellbeing is upheld.
As you transition back to the workplace, you may need support in ensuring the process is conducted correctly, you may need new working policies, risk assessments or Health and Safety Training.
Learn more about our HR Services, and how they may benefit you.
We wish you all the best in the return to work.
Never miss a blog. Sign up to our newsletter today.
Enjoyed the blog? Never miss a post by our team. Sign up to our newsletter today to receive monthly newsletters, and notifications about new blog updates on our website.
Fill in this brief form today to sign up.