Employers to pay 10% of furlough wages from today

By Nikkie Thatcher

- Last updated on GMT

Related tags: Legislation, Employment, Government, Training

Businesses including pub operators will have to pay 10% of furloughed workers’ wages with taxpayers contributing 70% from today (Tuesday 1 September).

The Coronavirus Job Retention Scheme (CJRS), which is commonly known as furlough, was first announced on Friday 20 March by Chancellor of the Exchequer Rishi Sunak.

It meant employers could claim​​​​ for payments that covered 80% of furloughed employees’ wages, up to a maximum of £2,500 per month. Employers also had the option to top up staff payments.

The scheme changed from August when employers were asked to make payments of national insurance (NI) and pension contributions.

Payment scheme

Employers will then have to pay 20% of furlough wages with taxpayers covering 60% in October, which is when the scheme ends.

At the time furlough contributions were announced, Sunak said: “In June and July, the scheme will continue as before with no employer contribution at all. In August, the taxpayer contribution to people’s wages will stay at 80%. Employers will only be asked to pay NI and employer pension contributions that, for the average claim, account for just 5% of total employment costs.

“By September, employers will have had the opportunity to make any necessary changes to their workplaces and business practices. Only then, in the final two months of this eight-month scheme, will we ask employers to start paying towards people’s wages.

“In September, taxpayers will pay 70% of the furlough grant, with employers contributing 10%. In October, taxpayers will pay 60% and employers will contribute 20%.”

Cautiously​ optimistic

Trade bodies reacted to the announced with mixed views. UKHospitality (UKH) chief executive Kate Nicholls hailed the announcement as a “positive and pragmatic step towards reopening the economy while recognising that this recovery will take time, particularly in hospitality”.

She added: “Giving businesses increased flexibility from the start of July is extremely welcome as hospitality looks to reopen its doors to the public.

British Beer & Pub Association chief executive Emma McClarkin was cautiously optimistic about the announcement.

The lockdown has highlighted the importance of local pubs to communities and in tackling loneliness and social isolation, according to Campaign for Real Ale (CAMRA) chief executive Tom Stainer.

The Government also introduced flexible furlough from 1 July meaning businesses could bring back furloughed workers on a part-time basis.

Related topics: Training

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