Coronavirus Update - Furlough Announcement
Chancellor Rishi Sunak announced on Friday 29 May changes to the Coronavirus Job Retention Scheme.
Key highlights from the announcement:
- 10 June 2020 will be the last day that employers can place employees on furlough.
- from 1 July, 'flexible furlough' is being introduced, meaning employees will be able to bring employees back to work that have previously been on furlough leave for any amount of time and any shift pattern. The employer will have to pay in full for any hours worked and be responsible for tax and national insurance on that amount. The employer will then be able to claim for any normal hours not worked from the scheme. Further guidance will be provided on the 12th June.
- from 1 August, employers will have to pay national insurance contributions and pension contributions, and can no longer reclaim them through the CJRS.
- from 1 September, the government will only reimburse 70% of salary (up to a maximum of £2,187.50). Employers are required to top-up to 80% (or more, depending on what the employer agreed with the employee).
- from 1 October, 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).
- the furlough scheme will close on 31 October 2020.
If you require advice on this or any other employment law related issue, please contact the Employment team at Downs Solicitors LLP.