Changes to the Coronavirus Job Retention Scheme

The winding down of the CJRS

July 2021 sees the beginning of the winding down of the Coronavirus Job Retention Scheme. Although furloughed and flexi-furloughed employees will continue to receive 80% of their reference salary for the time they are furloughed, there is a big impact on costs for employers.

The amount that can be claimed by employers reduces in July, and further reduces in August and September, the final month of the scheme.

How the changes will impact employers

Up until the end of June, employers could claim the full 80% of reference salary paid to employees.

From July, employers must fund 10% of this, with the remaining 70% being reclaimed from the UK government.

In August and September, employers must fund 20% of the reference salary, with the remaining 60% being reclaimed from the government.

There is no grant available after 30 September 2021.

The increase in costs to employers in the coming months is significant, and employers must now consider what happens at the end of September 2021.

What happens at the end of the Coronavirus Job Retention Scheme?

The options are:

  • Employees return to normal working hours.
  • Reduce employee contracted hours of work.
  • Termination of employment on grounds of redundancy.

There are many things to consider if you are not lucky enough to be able to bring your employees back to their normal hours.

A reduction in hours cannot be unilaterally imposed and requires an agreed variation to your contracts of employment – what do you do if you do not have a flexibility clause in your contract or your employees do not agree to a variation?

To safely terminate employment on the grounds of redundancy employers must follow a fair consultation and selection process. Also to be considered are the costs of redundancy and statutory notice period pay, bearing in mind that there is no furlough claim allowed for notice periods, which must be paid at full contractual pay rates. Any remaining accrued holiday pay must also be paid on termination.

Next steps

This is an incredibly difficult time for employers who must now look ahead and plan their workforce requirements.   You may find our workforce planning webinar useful, which can be viewed below.

Our team are happy to help you through this process, if you require more information or would like to discuss matters, please contact us.

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Please note this information is correct at the time of writing. Should further government guidance be issued we will provide an update, please watch our website for details.