The Government has announced that the furlough scheme will now become flexible, helping businesses to bring back some of those employees that they placed on the job retention scheme.
Chancellor of the Exchequer Rishi Sunak announced the move last Friday (29 May) with a view to help the UK economy bounce back after the coronavirus pandemic.
Talks in recent weeks have focussed on what steps could be taken with regards to furlough, as approximately 8.4 million people wait to get back to work.
In June and July, the furlough scheme will continue to be fully funded from Government coffers.
However, from August, whilst employees on furlough will still receive 80% of their wages up to a cap of £2,500 per month, employers will have to contribute a “modest amount”, approximately 5%, which could cover pensions and national insurance.
Then, from September the Government will cover only 70% of salaries, to a cap of £2,190 and from October it will pay 60%, to a cap of £1,875.
By October, employers are set to pay 20% towards those employee salaries who are furloughed, to top up the amount paid by the Government.
The Chancellor also revealed the flexibility part of the scheme, mentioning that employers could bring people back on a part time bases, from July, meaning that business pay for the days the employee works, and the furlough scheme picks up the rest.
For employment law advice contact Wake Smith’s employment team on 0114 266 6660.
