The Chancellor today announced the changes to the Government’s furlough scheme. All furloughed employees will continue to receive a minimum of 80% pay (up to a max of £2500).
The changes are staged for August, September and October as follows:
|Month||Government Contribution||Employers Contribution|
80% (max £2500 pm)
+ NI + Pens
80% (max £2500 pm)
+ NI + Pen
|August||80% (max £2500 pm)||NI + Pens|
|September||70% (max £2190 pm)||10% + NI + Pens|
|October||60% (max £1875 pm)||20% + NI + Pens|
A new flexible furlough scheme has also been introduced and will be effective from 1st July. Employers could opt to return employees on a part-time basis and pay them for the hours worked, and then furlough them for the remainder of their working week and the rate of contribution for this is as above.
The furlough scheme will be closed to new entrants on 30th June so, in order to be eligible and have a minimum of 3 weeks on furlough, employees will need to be furloughed by 10th June at the latest.
To meet these deadlines you now have just over one week to review and implement your furlough strategy.Part-time furlough will work for many employers, however, there will, unfortunately, be some that will need to consider the redundancy option.
Next steps for employers:
Review HR strategy in the next week in line with the latest guidance and our HR team can talk you through your options and advise on the best solution for you;
- Review HR strategy in the next week in line with the latest guidance and our HR team can talk you through your options and advise on the best solution for you;
- Furlough any employees by 10th June who you wish to continue on the new flexible furlough scheme as anyone furloughed after this date will not be eligible;
- Consider any other options including phased returns to work, reduction in working hours, linking staff contracts to performance of business, short-time working or redundancies. Do not leave these conversations until later this year as staff will be less responsive. Discuss with our HR team how to have these conversations now.
Self Employed Income Support Scheme
There were also changes to the SEISS announced. Eligible individuals can claim a 2nd final grant in August worth 70% of their average monthly trading. The grant will cover 3 months’ profit capped at £6570.
If you haven’t already we would encourage you to speak to our Head of HR Wendy McGarvey. Her team of HR experts can assist you with a discounted HR support package that will cover everything you need during this period including return-to-work advice and staff template letters that comply with the latest guidance, as well as restructuring and redundancy support.