The CJRS Employer Contributions, yet another hike for Businesses as of 1 August 2021

The CJRS Employer Contributions are here and yet again as of 1 August 2021, we will see another hike for Business owners, as they must contribute even more towards furlough payments under the tapered Coronavirus Job Retention Scheme (CJRS).

This comes at a critical time for many Employers and business owners, who will undoubtedly be in the process of facing those difficult decisions. These may be in returning workers, continuing with the Furlough Scheme and contributing, or considering initiating redundancies in the business. These are once again extremely difficult and emotive decisions that business owners must make.

What is changing  under the Coronavirus Job Retention Scheme (CJRS)

In a nutshell, from 1 August until 30 September 2021, the Government will pay only 60% of salary payments (capped at £1,875.00 each month) and Employers will need to top up the shortfall of 20% (up to £625.00).

This is a hike of 10% for any Employees who are on the CJRS, the current (July) payment by the Government is 70% of salary payments (capped at £2,187.50 each month), and Employers must contribute towards the shortfall of 10% (up to £312.50).

There are no plans from the Government to extend the CJRS, and it is due to end on 30 September 2021.

It is also important to note that Employers can no longer claim payments from the CJRS for Employees who are serving contractual or statutory notice period.

What are your options?

It may be that your business can facilitate the return to work and or the cost implications to cover the tapered contributions and that as a business owner you have factored these over the previous months.

It is safe to say that the pandemic has taken the UK by surprise and the recent delay in the roadmap will have caused many businesses to now rethink their return to work strategy.

You may want to consider redundancies in this instance. To do this, you need to first identify if a redundancy situation exists. In Employment Legislation, in particular under s139 Employment Rights Act 1996 a redundancy situation can arise as detailed below:

• Business Closure – Where there is a closure of a business or part of it in which the employee is employed.
• Workplace Closure – where there is a closure or intended closure of the place of work where the employee works.
• Reduced work – where there is a reduced requirement for employees to carry out work of a particular kind.

The Redundancy Process

The process of Redundancy is a dismissal and is considered a fair reason under s98 Employment Rights Act 1996. Businesses need to be mindful that a fair process is followed, including; demonstrating how the decision has been made (this would include the pool of individuals), the selection criteria, and crucially consulting with individuals.

Businesses can face unfair dismissal claims should they proceed, and the process not be followed. The financial impact on business owners can cause ruin, not to mention the time spent, effort, stress, and worry.

How can we help you

We understand the processes that are required, we can help business owners plan for any eventuality and proposed redundancies. We can offer our fully supported HR and Employment Law support, with advice and guidance on hand each step of the way. Our correspondence can either be provided bespoke or as template documentation, and these can be as single items or as a pack.

Why not contact a member of our team to have a free initial discussion? Let’s see how we can support you.

0333 006 9489 [email protected]

Updated 3 and 19 July 2021

Author

Fran Crossland