COVID-19 Update: Extension of the Coronavirus Job Retention Scheme - | Hudson McKenzie


COVID-19 Update: Extension of the Coronavirus Job Retention Scheme

On Tuesday 12th May 2020, The Chancellor of the Exchequer, Rishi Sunak, broadcasted to the nation that the Coronavirus Job Retention Scheme (CJRS) will be extended. The scheme is continuously monitored and was due to cease operating in June 2020. Now, the scheme will operate for another four months until October 2020. Changes will be made and be subject to review in July 2020.

We stood behind Britain’s workers and businesses as we come into this crisis. And we will stand behind them as we come through the other side”- Rishi Sunak.

The fundamental objective of the scheme is to financially assist small businesses and the British people. In an endeavour to achieve this, the UK government has invited employers who cannot afford to pay their staff to furlough their employees. This means that employees take leave from their employment and must not carry out work on behalf of their respective organisations. In turn, the government will pay a grant to employers of 80% of the salaries, up to £2500.00 per month, of furloughed employees. Employers must use the entirety of the grant to pay their furloughed employees on the contractual pay date in their employment contracts.

New statistics purport that the scheme has protected 7.5 million workers and almost 1 million UK businesses: a heaven-sent outcome for the British people.

However, this emergency measure has failed to avert financial calamities. Further UK government statistics show that businesses have been financially upheld through the provision of 268,000 Bounce Back Loans worth £8.3 billion and loans constituting approximately almost £7 billion via the Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme. This has already cost taxpayers a staggering total of £14 billion; rapidly bringing the UK to a cliff edge and grave uncertainty on the prospect of economic recovery.

“This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects”- Rishi Sunak

In a desperate bid to avoid a cliff edge to the UK economy whilst safeguarding the monetary needs of the nation, the following changes have been made for employers and employees:

For Furloughed Employees:

For Employers:

  • The scheme will operate as normal until end of July 2020.
  • Employers will continue to pay the grant to employees on furloughed leave
  • From the beginning of August, employers will be asked to contribute towards the salaries of furloughed workers. These payments by employers will succour the financial relief being provided by the government, whilst guaranteeing that furloughed employees continue to receive the 80% of their current salaries up to £2500.00 per month. 

Should you have any queries regarding the above information or if you are an employer or employee seeking legal expertise, please get in contact with a legal professional at Hudson McKenzie via email at or by telephone +44 (0)20 3318 5794.