Furlough scheme extended until end of October 2020

The Chancellor of the Exchequer has just announced that the Coronavirus Job Retention Scheme (CJRS), under which employees can be furloughed, has been extended to the end of October 2020.

The scheme will remain in its current form until the end of July 2020, but it will then allow people to return to work on a part time basis during August, September and October.  No details of how this will work have been announced yet, but we are promised that further information will be published by the end of May 2020.

The Chancellor also confirmed that the CJRS will continue to apply to all sectors of the economy, and that the existing arrangements under which an employer is able to recover 80% of an employee’s normal pay (subject to the cap of £2,500 per month) will remain in place.  However, from 1 August 2020, the Chancellor has said that this cost will be shared with employers.  It is not clear yet how the cost sharing will work, and whether this will only apply to employees coming back part time, or whether it will apply to all employees who are furloughed.  We assume that this will be clarified by the end of May 2020.

This announcement will be a big relief to the many employers who currently have people furloughed – apparently 7.5 million people have been furloughed across the country. Employers will now have more time to decide on the best way to manage the process of returning to some type of normality.

We will of course update you as soon as more information is available about how the changes to the scheme will work in future.