Since the furlough scheme was announced on 20th March 2020, more than a quarter of the UK’s workforce (some 8.9 million people) have been supported by it, with the current cost estimated at £19.6billion.
On 12th May 2020, Chancellor Rishi Sunak announced that the scheme would be extended from the end of June to the end of October, but with changes:
Furlough scheme until 30th June 2020
The original furlough scheme, scheduled to end on 30th June 2020 was relatively straightforward in both who footed the bill, and whether the employee could work or not. The rules stated that by placing an employee on furlough, they could undertake absolutely no work for your company, and must be furloughed for a minimum of 3 weeks. The government would then pay 80% of their normal monthly salary(up to a maximum of £2,500).
So, what’s changing?
On 29th May 2020, Sunak announced the details of how the scheme would work from July, including allowing workers to work part time whilst on furlough, and requiring employers to contribute to the costs.
• For employees already on furlough, in the month of June, nothing changes, and the old rules still apply (government pays full cost and no work to be undertaken).
• It is also worth noting that 10th June is the final date that an employee can be furloughed (as for an employee to be furloughed July-October, they must have been furloughed for at least 3 weeks by 30th June 2020).
• No new entrants to the furlough scheme allowed.
• Furloughed employees can now return to work part time, with employers able to claim the grant for normal hours not worked.
• The furlough grant is still fully funded by the government, but employers must pay employees for any hours they work.
• 31st July is also the final date to submit claims for staff furloughed before 30th June.
• From 1st August, employers will have to pay employers National Insurance contributions and pension contributions (no longer covered by the grant) for furloughed employees (both for hours worked and not worked).
• From 1st September, employers will have to pay 10% of wages (with the government paying 70% (up to a cap of £2,187.50) to bring the total up to 80%), plus employers NICs and pension contributions.
• From 1st October until the end of the scheme (31st October), employers will have to pay 20% of wages(with the government paying 60% (up to a cap of £1,875) to bring the total up to 80%), plus employers NICs and pension contributions.
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