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Extension of coronavirus job retention scheme

The Chancellor has issued a further update on the coronavirus job retention scheme. We discuss the changes below.

Extension to October

The scheme, which had been extended until 30 June 2020, will now be accessible until 31 October 2020. This will come as a welcome relief to employers following concerns from some commentators about the cost of the scheme and rumours that the scheme might be scrapped. Statistics show that currently 7.5 million people, a quarter of the workforce, are covered by the scheme.

The four-month extension is intended to provide time for businesses to reignite and reopen in a measured way whilst avoiding a cliff edge drop in support. This comes at a key time as many businesses were considering whether they would have to start redundancy consultations next week to comply with minimum timescales by the end of the furlough scheme on 30 June had no extension been given.

The extension means that furloughed workers across the UK will continue to receive 80% of their current monthly salary up to the cap of £2,500 per month.

New flexible arrangements

The scheme will continue in its current form until the end of July 2020.

However, from the beginning of August, furloughed employees will be able to return to work on a part-time basis and employers will be asked to pay a percentage towards the salaries of their furloughed staff. This arrangement will allow employees to have a phased return to work as well as giving businesses the chance to get back into full swing.

The employer payments will substitute the contribution that the government is currently making. We await further government guidance detailing how exactly this will work and what percentage employers will be expected to pay which is expected by the end of May.

Future developments

The government have announced that they will explore ways to provide support for furloughed workers to carry out additional training or learn new skills during this period.

We will provide further updates on the scheme as soon as these become available.


This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2022.


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