Changes to the Coronavirus Job Retention Scheme

At lunchtime today (12 May), the Chancellor announced an extension to the Coronavirus Job Retention Scheme (“the Scheme”). Previously extended to the end of June, the Scheme will now be in place until the end of October.

Employer contribution

In recent days, there were suggestions that the Chancellor would reduce the amount payable to employees from 80% to 60% of salary, as well as reducing the maximum cap of £2,500. Almost a quarter of the UK workforce have been furloughed, with their employers taking advantage of the Scheme to cover part of their wages.

Today’s announcement has confirmed that employees will continue to receive 80% of their salary during the period of the scheme and that no change will be made to the maximum cap. However, in a series of tweets prior to answering questions on the topic in Parliament, the Chancellor confirmed that employers will be asked to start sharing the cost of paying salaries.

Quite how this cost sharing will come about remains to be seen. Unfortunately, no detail has been provided today on the level of contribution expected of employers, whether it will be sector specific, or the affordability of an employer contribution if social distancing measures are still in place. Fuller details have been promised by the end of May.

It is expected that this employer contribution and reduction in the levels payable by the Government will apply from August onwards.

Part-time working

Taking on feedback from business, greater flexibility will also be built into the Scheme and the use of furlough leave with an eye on transitioning employees back to work. As it currently stands, an employee cannot undertake any work for their employer during the period of furlough leave. This creates difficulty for employers where there is a definite slowdown but not a complete cessation of work.

From August, employers who are currently using the Scheme will continue to be eligible to receive funds under the Scheme while employees work reduced or part-time hours. Again, fuller detail is expected at the end of May and it is hoped that this will confirm if a maximum weekly cap of hours will apply or if written agreement to these reduced hours is needed.

As the Scottish Government continues with the Stay At Home guidance, this announcement will be welcomed by Scottish businesses who are unable to open but unsure about how employee wages would be covered in the coming month. We will continue to update our site when we have further detail so check back regularly for the most up to date information.

Contact us

If you have any questions about furlough leave or other employment rights during this period, please contact a member of our specialist Employment team.

Latest updates from @MacRoberts

  • Huge congratulations to Rebecca Cox in our Corporate Finance team who has been shortlisted for the Rising Star of t… 2 hours ago
  • MacRoberts is delighted to be shortlisted at this year’s Scottish Legal Awards! We're up for Firm of the Year & t… 20 hours ago
  • Have you and your partner been considering moving in together? Are you aware of the legal implications that this ma… 29/07/2021
  • Following a consultation in 2019, the UK Government has outlined its intention to introduce a mandatory duty on emp… 29/07/2021
  • Our award-winning Family Law team can help you and your partner through difficult situations by providing support w… 27/07/2021
  • To celebrate the Olympic Games in Tokyo, we're delighted to launch our latest sporting challenge in support of our… 23/07/2021
  • MacRoberts is recruiting! We are currently looking for a Real Estate Planning Solicitor to join the MacRoberts tea… 23/07/2021
  • The countdown is on! With just 100 days to go, we’re looking forward to #COP26 in Glasgow! ♻️ As a firm accredite… 22/07/2021
  • Has lockdown led you to consider a move to the countryside? From discussing a possible purchase to obtaining the… 22/07/2021
  • Have you seen our latest vacancies? 💼 We currently have opportunities in various departments across the firm. Fin… 21/07/2021
  • Acas has published new guidance for employers with helpful information on #flexibleworking & #hybridworking. With t… 20/07/2021
  • Busting the myth that a career in law is only for the privileged few: @marikaflawyer is speaking at this morning’s… 19/07/2021
  • MacRoberts is recruiting! We are currently looking for a Support Services Assistant to join our team in Edinburgh.… 16/07/2021
  • MacRoberts is pleased to have been part of the team advising @HV_Systems in its £5m capital boost from Beehive Equi… 15/07/2021
  • MacRoberts is recruiting! We are currently looking for a NQ Solicitor to join our Conveyancing & Private Client te… 14/07/2021