September furlough update – employers are required to top-up 10% of wages

September furlough update
By Anthony Wolny | 2nd September 2020 | 2 min read

The Job Retention Scheme has once again changed as we enter September, requiring employers to now top-up 10% of furloughed employees wages.

Since the launch of the scheme in March, it has supported 9.3 million workers with wage relief, providing them 80% of their salary up to £2,500 a month.

As Chancellor Rishi Sunak has repeatedly stated that the Government will not be extending the scheme, organisations must prepare for the monthly changes as the support gradually tapers.

What has changed in September?

The September changes to the Job Retention Scheme are that the Government’s support will fall to 70% of furloughed employees wages with a cap of £2,187.50.

Following this contribution drop, employers are required to top up the additional 10% to ensure workers receive 80% of their wages.

In addition to the 10% top-up, employers must also continue to pay National Insurance contributions (ER NICs) and Pension contributions for all furloughed employees which were introduced in August.

What are the upcoming changes?

From October, the Government’s support will drop to 60% of furloughed employees wages with a cap of £1,875, requiring employers to top up the additional 20%.

The follow-up Job Retention Bonus scheme that encourages employers to keep on workers by providing a one-off payment of £1,000 for each furloughed employee brought back will also come into play.

The criteria for the new scheme requires employers to keep previously furloughed workers on from 1 November 2020 to 31 January 2021, and they must earn at least £510 a month on average.

Providing the criteria is met, employers will be able to claim their bonus once they have filed their PAYE for January with the payment due in February 2021.

How can IRIS help?

To ensure our customers are always compliant with the Job Retention Scheme changes, we’re continuously adapting our software.

You can view all our payroll offerings here to find the perfect solution for your organisation.

Also, to meet the demands of the people processes associated with furloughing, you need a flexible and powerful HR software.

Take a look at our various HR solutions here and discover how you can support those employees returning from furlough.