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Furlough Leave Extension Details

02 June

Furlough Leave Extension Details

The government has now confirmed detail of how the extended Coronavirus Job Retention Scheme is to be managed from July 2020 until the close of October 2020.

Based on that announcement, the following timetable may be a helpful reminder of rights and obligations regarding furlough leave and salary payments over the next few months: 

June

  • Government pays 80% of salary of furloughed employees (up to a maximum sum of £2500 per month) and meets employers’ national insurance and pension contributions; 

July

  • Government pays 80% of salary of furloughed employees (up to a maximum sum of £2500 per month) and meets employers’ national insurance and pension contributions;
  • Employers entitled to bring furloughed employees back to work on a part-time basis, the employer to decide the hours to be worked and to be responsible for paying the salary of the employee whilst they are at work; 

August

  • Government pays 80% of salary of furloughed employees (up to a maximum sum of £2500 per month);
  • Employers meet employers’ national insurance and pension contributions; 

September

  • Government pays 70% of salary of furloughed employees (up to a maximum sum of £2187.50 per month);
  • Employers meet employers’ national insurance and pension contributions and pay 10% of salary of furloughed employees (so that furloughed employee still receives maximum sum of £2500 per month overall);

October

  • Government pays 60% of salary of furloughed employees (up to a maximum sum of £1875 per month);
  • Employers meet employers’ national insurance and pension contributions and pay 20% of salary of furloughed employees (so that furloughed employee still receives maximum sum of £2500 per month overall);

Initial indications had been that part-time working for furloughed employees would be permitted as from August, and that employers were likely to be required to pay 20% of wages, plus national insurance and pension contributions for furloughed staff, from the same point in time, and so it would seem that the financial impact of such a move has been lessened, and the obligations of government and employer alike tapered, to try to avoid the ‘cliff edge’ scenario for employers, and so hopefully safeguard as many jobs as possible.

Concerns of course still arise. Calculation of figures due to be paid to furloughed staff by employers as from August, once part-time working is permitted, looks like a surefire recipe for a headache (and good luck to HMRC in dealing with applications). Of more impact on employers and employees longer term, even with the measures introduced by the government, there will undoubtedly be some hard decisions being made by businesses once they are required to start contributing again to the salary of staff who remain furloughed.

For further information or advice, please contact Dax Keeling on 0114 249 5969 or email d.keeling@bellbuxton.co.uk