Hogan Lovells Publications | 04 March 2021

The UK’s Job Retention Scheme

Although the government’s Job Retention Scheme (JRS) was originally expected to close on 31 October 2020, the government has extended it on several occasions. Following the Budget on 3 March 2021 it is now clear that the scheme will remain in place until the end of September 2021 (the extended JRS).

Under the extended JRS employers can place employees on furlough (temporary leave of absence) on a full time or flexible basis. They can claim 80% of usual monthly wage costs in respect of employees’ unworked hours from HMRC, subject to a cap of £2,500 per employee per month. The cap is pro-rated for staff on flexible furlough to reflect the hours they are not working. Employers must pay employer NICs and auto-enrolment pension contributions on the sums paid.

From July 2021 employers will also have to make a contribution to furlough wage costs paid under the extended JRS. This will be a 10% contribution in July and a 20% contribution in August and September. Employees will still be entitled to receive 80% of their normal wages subject to the cap.

Read more: The UK’s Job Retention Scheme

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