The Coronavirus Job Retention Scheme (CJRS), commonly known as ‘furlough’, was introduced in March 2020 by Chancellor Rishi Sunak to avoid employers laying off their staff when their places of business were forced to close in response to the COVID-19 pandemic.
The government initially paid 80% of the wages of those who could no longer work, or whose employers could not afford to pay them. The scheme was capped at £2,500 per month.
Fast forward to July 2021, the government’s contribution dropped to 70%, with employers required to pay 10% of the salaries of those on furlough. At the time of writing, the government now contribute 60% and employers must subsidise the remaining 20%, so that employees continue to receive at least 80% of their usual salary (still capped at £2,500).
What does this mean for employees?
On 30th September 2021, furlough should be ending once and for all. This means that all furloughed employees will either be called back to work or be made redundant.
If you are on furlough, you should already know what will be happening in your case come the end of the month. However, if you do not, you should reach out to your employer as soon as possible.
If you are, or believe you may be at risk of, being made redundant, it would be wise to investigate the government support available sooner rather than later. Schemes to help the unemployed, such as Universal Credit or Jobseekers Allowance, can take weeks to process new claims so it is important to ensure you have some assistance available if you have not been able to find alternate employment.
The most recent figures show 1.9 million people were on furlough at the end of June – although the current number will be lower, as the economy has reopened further in the last three months.
The Bank of England has predicted that there will be a small rise in unemployment once the CJRS ends.
However, the number of job vacancies is at a record high and, hopefully, there will be plenty of opportunities available to those who unfortunately do lose their jobs at the end of September.
What does this mean for employers?
If you are an employer who is still making use of the CJRS, you must ensure that claims for furlough days in August are submitted by 14th September. Likewise, the final claims for September must be submitted by 14th October, with any amendments filed by 28th October.
You must also ensure that your current employees know what to expect at the end of this month. Nobody should have it sprung on them that they don’t have a job to go back to at this short notice.
The CJRS has cost the government a significant amount of money yet has undoubtedly saved millions of jobs. The end of the scheme signals a return to normality that most in this country are longing for. However, it must be said that if the last 18 months has taught us anything, it is to prepare for the unexpected.
It is not beyond the bounds of possibility that furlough will return, or a similar incarnation will be introduced, if COVID-19 grows as an issue once again. Hopefully, this is not the case and for now, we will remain positive that the CJRS becomes a distant memory, and a similar scheme is not needed again.
If you have any questions regarding the end of the furlough scheme, please get in touch with your usual point of contact. Otherwise, feel free to contact our offices on 0161 399 0121 / 0151 303 3112 or by email email@example.com.