Since the Job Retention Scheme launched in March 2020, the word furlough became a familiar word for the majority of us and was something that employers across all sectors had to become familiar with very quickly. The scheme was designed to allow businesses affected by the pandemic to put their staff on furlough, rather than having to make the difficult decision and contemplate redundancies whilst the country were put under lockdown. Under the Job Retention Scheme, employees placed on furlough would receive 80% of their monthly pay, capped at £2,500 a month which would be paid by the Government. There has been significant uptake of the scheme with over 9 million workers across the UK furloughed since the scheme launched.
The Government have now announced that as the lockdown restrictions have now eased, with many more businesses being allowed to re-open from the start of July, the job retention scheme will come to an end entirely at the end of October and businesses will need to start contributing to the cost of their furloughed workers from August onwards.
What will change in August?
The Government have announced that from 1st August, employers will need to contribute by paying the National Insurance and pension contributions for their furloughed workers.
From the start of September, businesses will need to contribute 10% towards the cost of their furloughed employee’s salaries, rising to 20% at the beginning of October before the scheme ends at the end of October.
From 4th July, the scheme changed to allow furloughed workers to return to their employer on a part time basis. For example, as an employer you could pay an employee to work 3 days a week and the job retention scheme would still apply for the remaining 2 days.
On the 8th July, Chancellor Rishi Sunak announced a new scheme called the Job Retention Bonus in support of businesses who bring back a worker from furlough and continue to employ them between November and January. For each eligible worker, employers will receive a £1,000 bonus. https://www.personneltoday.com/hr/job-retention-bonus/
In addition, the Chancellor also announced another new scheme named the Kickstart Scheme, which is designed to support people aged 16-24 by subsiding the cost of a “kickstarter’s” pay and covering the cost of up to 25 hours work a week at the National Minimum Wage level. https://www.bbc.co.uk/news/uk-politics-53324201
What remains the same?
Although many of the lockdown restrictions have been eased across the UK, the guidance remains that where possible employees should be allowed to work from home and this forms part of a business’s commitment to being a Covid secure workplace. A risk assessment should be undertaken to determine the risks and to establish ways each individual workplace could reduce the risk of infection- this should include homeworking and taking all reasonable steps to maintain social distancing in the workplace.
Although there is still much uncertainty for individuals, businesses, health and the economy- the new schemes announced by the Government and the easing of lockdown restrictions throughout July provides some comfort to businesses that we are beginning navigate our way through the pandemic and there is a feeling of cautious optimism as we look beyond 2020.