Today (Wednesday 10th June 2020), is the last day in which employers can place employees on furlough for the first time and be eligible to claim the relevant grant payment. The Scheme will be closed to new entrants from 1 July 2020 and, from that point onwards, employers will only be able to furlough employees who have been furloughed for a full three-week period prior to 30 June 2020. This means that the final date by which an employer can furlough an employee for the first time is 10 June 2020, in order for the required minimum three-week furlough period to be completed by 30 June 2020.
From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced to help support people back to work. Organisations will decide the hours their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.
From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, organisations will be asked to contribute, but individuals will continue to receive that 80% of salary covering the time they are unable to work.
The scheme updates mean that the following will apply for the period people are furloughed:
- June and July: The government will pay 80% of wages up to a cap of £2,500 as well as 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 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 ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. 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. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
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