COVID-19: furlough scheme update

Following on from the announcement a couple of weeks ago that the furlough scheme had been extended, Chancellor Rishi Sunak has now provided more information in terms of the specifics. These are summarised as follows:

• From 1 July, employers have the option to bring back furloughed employees on a part-time basis, with the Government covering 80% of the wages for any of their normal hours that they do not work up until the end of August. It was previously announced that this would be effective from 1 August, so has been brought forward by a month

• Employers can decide the hours and shift patterns that returning employees work, and will be responsible for paying the wages in full while working

  • Any working hours arrangement must cover a period of at least one week and be confirmed to the employee in writing

From 1 August onward, the Government contributions will be slowly tapered. This is explained as follows:

• In August, the Government will continue to pay the 80% of wages as before but employers will have to pay the employer’s NIC and pension contributions for any staff still on furlough

• In September, the Government will pay 70% of the wages up to a cap of £2,187.50 per month. Employers will pay the employer’s NIC, pension contributions and 10% of the wages for any staff still on furlough, up to a total cap of £2,500 per month

• In October, the Government will pay 60% of the wages up to a cap of £1,675 per month. Employers will pay the employer’s NIC, pension contributions and 20% of the wages for any staff still on furlough, up to a total cap of £2,500 per month

Note that the cap on the furlough grants will be relative to the hours not worked for any employee who returns on a part-time basis.

It was also announced that the furlough scheme is to be closed to new entrants from 30 June. Therefore, the latest any employee can be furloughed (if not already) will be 10 June.

The Chancellor also stated that further support and information will be available by 12 June - so keep your eyes peeled (and hands clean)!