Important updates to the furlough scheme – including imminent deadlines
As you may be aware, last week, Rishi Sunak provided further details on the upcoming changes to the Coronavirus Job Retention Scheme (furlough).
With effect from 1 July 2020, furlough will become more flexible, allowing furloughed employees to be able to work on a part time basis. This will require employers to pay their normal rate of pay for any hours worked – further advice on how to calculate what you can reclaim in this situation will be released on 12 June 2020.
The Chancellor also announced that employers will begin to contribute as detailed below:
June & July
- The government will pay 80% of wages up to a cap of £2,500.
- The government will pay Employer National Insurance (ER NICS) and pension contributions.
- Employers are not required to pay anything.
August
- The government will pay 80% of wages up to a cap of £2,500.
- Employers will pay Employer National Insurance (ER NICS) and pension contributions (for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed).
September
- The government will pay 70% of wages up to a cap of £2,187.50.
- Employers will pay 10% of wages to make up to 80% total, up to a cap of £2,500.
- Employers will pay Employer National Insurance (ER NICS) and pension contributions (combined with the 10% above, for the average claim this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed).
October
- The government will pay 60% of wages up to a cap of £1,875.00.
- Employers will pay 20% of wages to make up to 80% total, up to a cap of £2,500.
- Employers will pay Employer National Insurance (ER NICS) and pension contributions (combined with the 20% above, for the average claim this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed).
Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
Please also be aware that the deadline for adding an employee to furlough will be 10 June 2020 to allow a minimum period of 3 weeks to be completed in time for the new scheme beginning on 1 July 2020.
Upon receiving the further guidance on calculations, expected to be released on 12 June 2020, we will provide an updated letter template enabling you to obtain employee consent to the flexible furloughing arrangement.
A fact sheet, along with full guidance can be found on the government’s website