The Chancellor Rishi Sunak has announced details of the extension of the furlough scheme – here we round up the key points for HR professionals…
Following the original furlough announcement at the beginning of the UK’s COVID-19 lockdown, details have now been released for the extension of the scheme, which will run until the end of October 2020.
We are pleased to see, as we suggested recently that from July it will be possible to bring staff back to work part time, so that they are partly furloughed and partly employed. This will be vital to help companies keep things moving and to ensure that important preparation, maintenance and admin work is done.
June continues as before, but changes start from July, when furloughed employees can work part time, and then we see the scheme tapering off, with more of the burden of paying salaries returning to the employer.
Here’s our month by month guide
The government will continue to pay 80% of furloughed workers wages for this month. This is capped at £2,500, plus employer pension contributions and national insurance.
Your company does not have to pay out anything, although some businesses are topping up the 20% of their employees’ salaries.
This is the last month when you can furlough an employee – the cut-off date is 10 June. The scheme is closing on 30 June to new applications, but you must show that your member of staff has been furloughed for three weeks up until that date, so ensure to keep clear records.
The government will continue to pay 80% for wages as detailed above.
Companies will also be able to start bringing back employees on a part-time basis. In this case, the company will pay them for the hours they work (including pension and national insurance contributions), while the government will continue to pay 80% for the furloughed hours. The capped figures will apply in proportion to the hours not worked.
While the government still pays 80% of wages, the burden for pension and employer national insurance payments reverts back to the employer.
This month, the government will drop its percentage payment to 70% of salaries, with a cap of £2,190. Your company must pay the extra 10%, along with pension and national insurance contributions.
This month sees the scheme winding up. The government payment drops again, to 60% with a cap of £1,875. So, your business will need to make up the extra 20% plus pension and national insurance.
To apply for the furlough scheme for your company, visit the gov.uk website.
If you would like to discuss this subject further and find out how we could help you navigate the furlough scheme and other COVID-19 related issues, please contact Cecily Lalloo at Embrace HR Limited.
T: 01296 761 288 or contact us here.
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Based in Aylesbury, Buckinghamshire, Embrace HR Limited supports business owners who do not have their own HR department or those that do but need help from time to time. We also work across the Home Counties of Oxfordshire, Bedfordshire and Hertfordshire, and also SMEs based in London.