When it commenced the furlough scheme meant that furloughed workers must not carry out any work for their employer.
This will change from 1 July. Employers will be able to bring back furloughed workers on a part-time basis. The employer must pay the employee in full for the hours worked but can continue to claim the Coronavirus Job Retention Scheme (CJRS) grant for the furloughed hours.
The furlough scheme will close to new entrants on 30 June. As employers will then only be able to furlough employees who had been furloughed for a full three week period at 30 June this means the final date for furloughing an employee for the first time is 10 June. Claims for the period to 30 June must be made by 31 July. The scheme will continue until 31 October 2020.
At present the government is contributing to the wages, National Insurance (NI) and pension contributions of furloughed employees to ensure that they receive 80% of their salary, up to £2,500 per month. Employers can choose whether to pay any additional amount.
From 1 August the government will reduce their financial support with employers having to make contributions to ensure that employees receive at least 80% of their salary, as previously.
In August the government will pay 80% of a furloughed employee’s salary, up to £2,500 per month. Employers will be responsible for the Employer’s NI contributions and pension contributions.
In September the government will pay 70% of a furloughed employee’s salary, up to a reduced cap of £2,187.50 per month (ie 70% of the £3,125 gross maximum). Employers will be responsible for the Employer’s NI contributions and pension contributions and a contribution towards wages, to bring these up to 80% of the £2,500 CAP. eg Maximum £3,125 x 80%, government was paying £2,500. £3,125 x 70%, government pays £2,187.50, employer pays £312.50, employee receives £2,500 as previously.
In October the government will reduce its contribution to 60%.
With retailers starting to open this month for many businesses this reduction in support may not make a lot of difference.
At present it is thought beauty parlours, hairdressers, pubs and restaurants may be able to open in July. Social distancing measure are, however, likely to substantially reduce their income from pre-Coronavirus levels so it remains to be seen how these businesses will cope.
Should you have any queries please do not hesitate to get in touch.