Posted on Jul 20, 2020
When the Coronavirus Job Retention Scheme was initially made available, its purpose was to issue grants to employers to ensure they could retain and continue to pay their staff despite having to close. Under the scheme, the Government covered 80% of the wages of furloughed employees up to £2,500 a month. In May, the Chancellor announced this scheme will be available to employers until the end of October.
Flexible furlough scheme
On the 12th June, the Government announced further changes to the scheme to allow it to become more flexible to businesses as they start to reopen and bring back furloughed employees. These changes mean that businesses can now bring back previously furloughed employees from July 1st to suit their requirements on a part-time basis.
These changes give businesses the chance to decide the hours and shift patterns of their employees – the Government will still continue to pay 80% of the wages for the hours that they do not work. While the employees are at work, the business will be responsible for paying their wages. No new employees will be able to go on furlough for the first time, unless they are returning from statutory parent leave.
Businesses have taken different approaches to these new updates, with some opting to rotate employees, bringing them off furlough for several weeks at a time or bringing employees progressively out of furlough based on immediate requirement. In order to rotate employees, you will need to ensure they have been furloughed for a period of 3 consecutive weeks at some point before 30 June. From the 1st July, there is no minimum furlough period and employees can be brought back part-time for any hours or shift patterns agreed between employers and employees.
Reduced Government grant
From August, the 80% grant will gradually be reduced, and employers will need to make contributions towards the wages of furloughed employees. The timeline is set out as follows:
August – Government will pay 80% of wages
Employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
September – Government will pay 70% of wages
Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
October – Government will pay 60% of wages
Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
If you have any concerns about your insurance over this time or need to make some changes to your existing policy, don’t hesitate to get in touch with the team at Watkin Davies on 02920 626 226.
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