COVID-19 – extension to Job Retention Scheme 13 May 2020

Yesterday (12 May 2020), Chancellor Rishi Sunak announced that the Government’s Job Retention Scheme (the Scheme) will continue to operate until October 2020.

At present, details of how the Scheme will operate going forward are very scant. However, it appears that the rules of the Scheme will remain in place as they stand until the end of July 2020.

After this point, there are plans to allow “greater flexibility”, including the introduction of a “partial furlough” category, where employees will be able to return to work part-time, whilst continuing to be furloughed for the remainder of their normal hours.

Crucially, it seems that, from August 2020 onwards, the Government will be looking to employers to foot at least some of the payroll bill. It has been intimated that at least 50% of wages will continue to be reclaimable through the Scheme, but that the Government is looking to employers “to share the costs of paying people’s salaries”.

For employers in sectors which have received little to no income so far this year (such as the holiday and leisure industry, due to its seasonal nature), it will be difficult, if not impossible, to find the cash to contribute in the way that the Government envisages.

We await further details in respect of the new iteration of the Scheme, which should be released by the end of May 2020.

[CONTENT CORRECT AS AT 13 MAY 2020]

If you would like to discuss any of the issues raised in this briefing, or have other concerns about the impact of Coronavirus, please contact Rachael Lloyd, James Baker or Andrew Tobey in Michelmores’ Employment team.

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This article is for information purposes only and is not a substitute for legal advice and should not be relied upon as such. Please contact our specialist lawyers to discuss any issues you are facing.