Over recent weeks, the Government has announced a number of changes to their furlough scheme, designed at encouraging businesses to get their employees back to work.
The Coronavirus Job Retention Scheme was designed to help employers pay staff wages during lockdown and to potentially stop mass redundancies. Originally intended to cover wages for March, April, and May, it was later extended to also cover June. Recent announcements have now extended the scheme to the end of October. Here’s what you need to know as an employer (and the key dates you need to log in your diary).
10 June 2020
This is the last date that you can put staff on furlough for the first time. Employers are able to furlough any staff who were on their books on or before 28th February. The current furlough scheme enables the State to pay 80% of employee salaries, up to £2,500 a month.
If you haven’t furloughed an employee by 10th June 2020, you won’t be able to access the scheme, so it’s vital that you consider your staffing for the next few months.
1 July 2020
Employers can call furloughed staff members back to work part-time. Employers will be required to pay employees for their hours worked, with the State topping up the rest of their wages up to 80% of their pay, with the continued cap of £2,500 a month.
For furloughed staff members who are not required to return to work part time, the government will continue to make payments of 80% of their wages.
1 August 2020
The State will still continue to pay 80% of wages for furloughed staff members, but employers will be required to pay national insurance and pension contributions. We recommend that you should have a plan in place to cover this additional cost to your business and should be considering how you bring furloughed staff members back into the workplace.
1 September 2020
The State’s contributions to furloughed employees’ pay will be reduced to 70% of their wages with employers required to top up the remaining 10%. Employers will also still be required to pay national insurance and pension contributions.
1 October 2020
Furlough contributions will reduce by a further 10% meaning that the Government’s contribution will be 60% with employers covering the remaining 20%.
31 October 2020
On this date the Covid Job Retention Scheme will end. This means that any employers who still require their staff members to be furloughed will need to pay them out of their businesses.
What should you do as an employer?
You need to begin planning for an increase in employment costs. This could mean that you may need to redeploy staff, renegotiate contracts to reduce hours, or that you may need to begin considering making redundancies. While it’s obviously very difficult for some industries and sectors to predict what their takings will be over the coming months, many should now be in a position where they at least have a plan of action for a return to work.
In all cases, it is important to consult with employees to see whether they are open to increased flexibility or to renegotiated contracts. We also advise staying up to date with Government announcements regarding furlough, business continuity, and employment as dates and plans do change.
For professional HR guidance and advice, Jackie and the team at Dakota Blue are available to help you and your team safely return to work, just get in touch.