Latest Update on the Furlough Scheme
As expected, the Chancellor announced reforms to the Coronavirus Job Retention Scheme (“the Scheme”) on Friday 29th May 2020.
The changes announced include:
- 10 June 2020 will be the last day that employers can place employees on furlough for the first time. The Scheme will close to new entrants from 30 June 2020 and from this point onwards, employers will only be able to furlough employees that they have already furloughed for a full 3 week period prior to this date.
- From 1 July 2020: Employers will be able to place employees on flexible furlough. This means the employee remains on furlough and the employer continues to claim the grant (80% or £2,500 cap) but the employee will be able to return to work part-time. The employer will have to pay the wages for the time worked but will be claim the grant under the Scheme to top employees up to 80%. The updated guidance states that this can be for any amount of time and any shift pattern. Employers will therefore need to decide on a time split. A part time worker is someone who works fewer hours than a full time worker. There is no specific number of hours that makes a person full or part time. Full time workers usually work 35 hours or more per week.
- From 1 August 2020, employers will be obliged to pay employee’s National Insurance and pension contributions for those on furlough. Employers will not be able to reclaim them through the Scheme. The Government will however continue to pay 80% of employee’s wages up to a cap of £2,500.
- From 1 September 2020, the government will provide a grant of 70% of employee’s salary (up to a maximum of £2,187.50). Under the Scheme, employers will be required to top-up to 80% up to a cap of £2,500.
- From 1 October 2020, the Government will reduce the grant to 60% of employee’s salary (up to a maximum of £1,875), and employers will continue having to top up to 80% up to a cap of £2,500.
- The Scheme will end on 31 October 2020.
Full details on flexible furloughing and further guidance on how to calculate claims going forwards will be published on 12 June 2020.
If you would like any advice on the Furlough Scheme or any other employment/HR related matters, please contact our Employment Partner, Kate Brooks on 01202 525333 or email firstname.lastname@example.org.