Last reviewed 29 May 2020

While the Government is currently paying 80% of workers' salaries up to £2500 a month for some 8.4 million workers under its furlough scheme, it has made clear that it cannot continue to provide this unprecedented level of support for an indefinite period.

Now Chancellor Rishi Sunak has announced that, although the Coronavirus Job Retention Scheme (CJRS) is set to run until October, employers will be asked to begin to pay a share of the wages.

In August, they will be expected to meet National Insurance (NI) and pension contributions while the Government continues to meet the 80% of salaries. For the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

In September, the Government percentage will be reduced to 70% (a cap of £2187.50) and in October to 60% (a cap of £1875) with employers expected to make up the 10% and then 20% difference.

They will also be expected to pay the NI and pension contributions.

For these two months, and for the average claim, this represents 14% and 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

In addition, Mr Sunak said that furloughed staff will be able to work part-time in their old roles from 1 July (a month earlier than previously announced) with individual firms deciding the hours their employees will work on their return and their shift patterns.

A survey by the Institute of Directors (IoD), carried out before the latest announcements, has suggested that a quarter of businesses using the furlough scheme will struggle to meet these requirements.

On the other hand, the survey of almost 700 company directors found that around half of those using the Job Retention Scheme for their staff would be able to provide 20% toward furloughed workers’ full-time salaries between August and October.

Over a third of those using the scheme said they would bring the majority of their furloughed workers back part-time, when the scheme allowed it. Fewer than one in 10 said they would not bring anyone back part-time.

Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked, HM Revenue and Customs (HMRC) has confirmed.

Employees who believe they are not getting their 80% share can also report any concerns to the HMRC fraud hotline and it will not hesitate to take action against those found to be abusing the scheme.