Employment FAQs
Published on 13/04/2021
Updated on 01/07/2021
The Government announced the extension of the Coronavirus Job Retention Scheme in March 2021, confirming that the scheme would be extended until 30 September 2021. However, the level of grant available to employers changes from 1 July 2021.
Up until 30 June 2021, the Government will contribute 80% of wages for hours not worked up to a cap of £2,500.00.
From 1 July 2021, Government contributions to wages for hours not worked by employees are being reduced. The table below sets out the changes to Government contributions under the scheme across the next three months:
| Month | Government contribution to wages for hours not worked | Employer contribution to wages for hours not worked | Employer contributions to National Insurance and Pension Contributions |
| July | 70% up to £2,187.50 | 10% up to £312.50 | Yes |
| August | 60% up to £1,875.00 | 20% up to £625.00 | Yes |
| September | 60% up to £1,875.00 | 20% up to £625.00 | Yes |
From 1 July 2021, employers who have furloughed their staff will now need to contribute towards furloughed employees’ wages. This means the employee’s wages will now be made up of the reduced contribution from the Government, and the contribution from the employer.
Employers will need to continue to make National Insurance and Pension contributions, and can continue to choose to top up employees’ wages above the 80% total at their own expense should they wish to.
With Covid-19 restrictions still in place, and many industries unable to operate at full capacity, for some employers this additional financial contribution may mean that they need to consider redundancies or other alternatives, such as varying terms or agreeing salary reductions if they cannot manage the additional financial contributions.
The off-payroll working rules (IR35) was extended to large and medium-sized companies in the private sector, effective 6 April 2021. Businesses will be obliged to determine the employment status of individuals with whom they engage. HMRC released an updated version of their online checking tool (known as ‘CEST’) and businesses are encouraged to use this to obtain a determination.
Many workers will have received a pay increase from April 2021 following a rise in the highest level National Minimum Wage (NMW) to £8.91 per hour. Eligibility for the National Living Wage has also been increased as more young people will qualify with as those aged 24 and 25 to 23 now being entitled to receive it.
Other national minimum wage rates also increased, with hourly rates rising to £8.36 for workers aged 21 and 22, to £6.56 for workers aged 18 to 20 and to £4.62 for workers aged 16 and 17.
If you were made redundant on or after 6 April 2021, your weekly pay for the purposes of redundancy calculations will be capped at £544 and the maximum statutory redundancy compensation you can receive is £16,140, excluding notice pay.
Any payment calculations will be based on your actual salary not any lesser sums you may have been receiving as a result of being furloughed.
If you are off work for a family absence, maternity, paternity, adoption or shared parental leave the statutory payment for these absences increased to £151.97 with effect from 4th April.
If you are absent from work due to illness, and qualify for SSP, this increased to £96.35 a week with effect from 6th April.
The previous FAQs have now been archived. To read them, please click below:
This information was provided by the employment teams at LawExpresss and Ashfords Solicitors.
Disclaimer - all information in this article was correct at time of publishing.