Changes to Furlough
Wednesday 10 June 2020 was the last day that an employer could place staff on furlough for the first time under the Coronavirus Job Retention Scheme (CJRS).
Staff previously placed on furlough will continue to be eligible for the CJRS until the scheme closes on 31 October 2020.
However there is one exception to that – a parent returning from statutory maternity or paternity leave remains eligible for furlough even if they are being furloughed for the first time after 10 June 2020 with the proviso that the employer must have previously furloughed other employees.
There are further changes to the Scheme planned over the coming months as the Scheme is phased out. The government plans to issue further guidance on these changes on 12 June 2020, but for the time being the most notable changes are:
1. 1 July 2020 – the government are introducing a Flexible Furlough Scheme (apologies for the unfortunate acronym which probably reflects how many of us might be feeling!). Employees will therefore be able to work part-time and be furloughed part-time. Businesses will decide how that will work (in terms of the time split). Any furlough period will have to be at least one week (currently furlough is for a minimum of 3 weeks).
2. 1 August 2020 - employers will have to pay employee's national insurance contributions and pension contributions. This can no longer be reclaimed through the CJRS.
3. 1 September 2020 - the government will only reimburse 70% of salary (up to a maximum of £2,190). Employers are required to top-up to 80% (or more, depending on what the employer has agreed with the employee).
4. 1 October 2020, the government will only reimburse 60% of salary (up to a maximum of £1,875), and employers will continue having to top up to 80% (or more as agreed).
5. 31 October 2020 - the Furlough Scheme will close.
A note for the self employed
- the self-employed grant is being extended, with applications opening in August for a second and final grant. There will be parity with the reducing furlough scheme, paying 70% (not 80%) of average earnings up to £6,750.
Final note on Redundancy….
Given that we are now entering the next phase of the lockdown many businesses are having to consider how best to manage their business and staffing requirements for the foreseeable future. This will inevitably lead to redundancies in many circumstances. Garden House Solicitors’ Employment Law Team are available to offer advice to employers and employees on what steps should be taken or how best to deal with the prospect of impending redundancies. For expert advice please call our offices to make an appointment to discuss how redundancy will affect you as an employee and your business as an employer.