Furlough Changes In The Months Ahead

After all of the news surrounding changes to the Furlough Scheme, the coming months might get quite confusing for business owners.

When do businesses need to start contributing themselves? What are the best decisions to make moving forward?

In this blog we’ll explain the roadmap that lies ahead for the furlough scheme.

June 2020

In June things will be largely staying the same regarding the Furlough scheme.

The government will continue to contribute 80% of workers wages, up to a maximum of £2,500 as well as their NIC and pension contributions for the hours that the worker doesn’t work.

Employers will still have to pay their employees for the hours that they do work.

From June 30th you will only be able to furlough employees that you have previously furloughed for a full 3 week period since the scheme started.

This means the final date you can furlough an employee, who has never been furloughed, is 10th June.

July 2020

In July the payments from the government remain the same. However, you will have the flexibility to bring furloughed workers back to work on a part time basis.

The government will continue to pay 80% of their wages that they do not work (including NIC and pension contributions) but you as their employer will have to pay for the part-time hours that they do work.

Bringing a worker back part time is completely optional at this stage! You can decide on the hours and shift patterns that your employees will work.

They can work for as little or often as your business needs, and there is no minimum time that you can furlough staff for.

These arrangements must cover at least one week, and be confirmed to the employee in writing. You will need to report and claim for a minimum period of one week, although you can choose to claim for a longer period if you prefer.

The deadline for any claims prior to 30th of June will be the 31st of July.

August 2020

From August the government will stop paying for an employee’s NIC and pension contributions, and the employer will have to pay these themselves. 

The payment from the government will continue to be 80% of a workers unworked hours, to a cap of £2,500.

September 2020

In September these wage contributions from the government will drop for the first time.

The government will pay 70% of wages, up to a new maximum of £2,187.50 for the hours an employee does not work.

Employers will pay the NIC, and pension contributions + 10% of a workers wages, to bring the total up to 80% and maximum cap of £2500 again.

October 2020

In October the government wage contributions will decreased again.

They will pay 60% of wages, up to a maximum of £1,875 for the hours an employee does not work.

This means that employers will pay NIC, pension contributions, and 20% of wages to bring the figures back in line again to 80% and £2500.

At the end of October, the furlough scheme is set to cease.

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