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COMMENTARY: Government announces coronavirus furlough scheme changes

When the UK went into lockdown due to the coronavirus pandemic, Chancellor Rishi Sunak outlined the details of the Coronavirus Job Retention Scheme. The scheme allows furloughed staff to receive 80% of their wages paid for by the Government with the remaining 20% paid by the employer at their discretion. However as Chancellor Sunak announced last week, the scheme’s rules are changing over the coming months as the UK plans to ease lockdown measures. 

The coronavirus furlough scheme timeline

On Friday 29 May, the Government released its latest information on the Coronavirus Job Retention Scheme:

June / July 2020 – Government contribution will remain as 80% of earnings (max cap of £2,500 per month) plus National Insurance (NI) and pension. Employers do not have to contribute anything on top of this. 

August 2020 – Government contribution will be 80% of earnings (max cap of £2,500 per month) but the employer will have to pay the NI and pension.

September 2020 – Government contribution reduced to 70% of earnings (max cap of £2,190 per month) and the employer will have to contribute 10% of the employee’s salary plus paying the NI and pension.

October 2020 – Government contribution to reduce to 60% of earnings (max cap of £1,875 per month), with the employer contributing 20% of the employee’s salary plus paying the NI and pension.

Flexible furlough scheme

A new flexible furlough scheme will be effective from 1st July. Employers could opt to return employees on a part-time basis and pay them for the hours worked, and then furlough them for the remainder of their working week on the rates set out above.

Deadline to furlough your staff

The furlough scheme will be closed to new entrants on 30th June so in order to be eligible and have a minimum of 3 weeks on furlough, employees will need to be furloughed by Wednesday 10 June at the latest.

It has also been announced that the scheme is to close at the end of October 2020.

Further information

For further information on how our team can help your business tackle the everchanging legislation in employment law at the moment, please speak to: