Furlough Update

Furlough Update

Deadline to furlough an employee for the first time and other changes to the furlough scheme

This update is correct as at 3^rd June 2020 but there may be further changes and updates.

Many readers will be aware that the Government announced how the furlough scheme will change over the coming months, in that employers will be required to contribute to payment. In case you have missed this, the changes are detailed below.

What you may not have realised is that in order to be able to a claim under the furlough scheme on or after 1 July, the employee must have been furloughed for a full 3-week period prior to 30 June. That means that the last date for furloughing an employee for the first time is 10 June 2020.

For those employees who are furloughed from 1 July, employers will still be able to claim 80% of wages, up to the £2,500 cap, for time spent on furlough but it will be possible for employees to return to work on a part time basis. Any work that an employee does must be paid at 100% of salary by the employer.

From 1 August, employers will be required to pay employer’s national insurance contributions and pension contributions, although the government will still pay 80% of wages.

The scheme changes again from 1 September in that employers must also pay 10% of wages to employees, with the government only paying 70%, with a cap of £2,187.50.

From 1 October, employers must pay 20% of wages, with the government paying 60%, with a cap of £1,875.

The scheme ends completely at the end of October, at which time employers will either need to allow employees to return or place them on lay off or agree short time working (if they have the right to do so or the employee agrees).

Details of the changes and the guidance to employers can be read HERE and HERE.