New leave changes starting today as government support shrinks for 2 million workers – .

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New leave changes starting today as government support shrinks for 2 million workers – .


Government contributions for workers in the job-retention scheme will decline again from this month, as the Chancellor prepares to end support for good this fall.
Starting today, Treasury support will drop from 70% to 60%, prompting employers to start paying a minimum of 20% per employee, plus national insurance and pension contributions on top.

This is part of a reduction in the program before its final closure this fall, alongside the closure of the fifth SEISS grant for the self-employed.

From August 1, employers will have to pay 20% of the salary of staff on leave. This level of contribution will continue until the end of the scheme in late September, the Treasury said.

Under the changes, the government will contribute 60% of the salary up to a maximum limit of £ 1,875 for the hours the employee is on leave.








The program ends September 30
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Image:

Simon Walker HM Trésor)

“The Coronavirus Job Retention Scheme has been put in place to support employers who are unable to function normally due to the pandemic,” said Kate Palmer, employment expert at the resource consulting firm human Peninsula.

“By designating employees as ‘on leave’, employers were able to recoup some of the employee’s wage costs up to a cap of £ 2,500.

“As confirmed by the government budget tabled on March 3, 2021, the system will continue to operate until the end of September 2021.”

From 1 August 2021 and until the end of the program, the government subsidy will increase to 60% of the wages of employees on leave for their non-working hours, with a cap of £ 1,875.

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“With the 80% rule still intact, employers will have to contribute 20% of staff salaries up to £ 625,” Palmer added.

Those on flexible leave (working only a few hours) will be paid in full by their employer for the hours worked, and the grant will cover 80% of the salary for their hours not worked only, subject to a cap below £ 2,500.

“Until the end of September, employers will also have to cover national insurance and pension contributions. “

In total, nearly three million people have left the leave program since March of this year, when businesses reopened.

However, the latest full results show that 1.9 million people were still participating in the program at the end of June.

That’s still low, compared to a peak of nearly nine million at the height of the pandemic in May last year.

In the past three months, the youngest have left the regime twice as fast as all other age groups, with nearly 600,000 under 25 leaving the regime, according to Treasury figures.

Jobs in industries such as hospitality and retail are now exiting the program fastest – with more than a million people exiting in the past three months.

However, industry insiders say the cut is still too early.

The New Economics Foundation (NEF) estimates that 600,000 workers could be threatened with layoffs or reduced hours or wages when support ends next month.

He said the additional 20% employer contribution would not pay off for about a third of the jobs on leave, or the equivalent of 250,000 workers.

The NEF report also found that without the current extension, up to 3 million jobs could have been lost.

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