Important deadline approaching!

The government Job Retention Scheme has enabled employers to ‘furlough’ employees as an alternative to lay offs or redundancy during the coronavirus crisis, whilst recovering 80% of wage costs up to a maximum of £2500 per employee.

On 29th May the chancellor announced important changes including closure of the existing scheme and the introduction of a replacement flexible furlough scheme.

Eligibility

The existing scheme will close to new entrants on 30th June. From this point onwards employers will only be able to furlough employees that have already been furloughed for a full 3 week period prior to 30th June.

Employers who want to place new employees on furlough must do so by 10th June so the minimum 3 week period can be achieved.

Flexible furlough scheme

From 1st July employers will be able to use flexible furlough arrangements which will enable a return to part time work for qualifying employees. By way of example, an employee who normally works 5 days per week could return to work for 2 days per week. Wages for the 2 days worked will be paid by the employer as normal, with the remaining 3 days being covered under the scheme.

Financial changes

There are no financial changes expected to the scheme during June and July.

From August a number of changes will be phased in, with employers beginning to make a contribution to the wage costs of furloughed employees. The exact details of the new scheme rules are set to be published on 12th June.

Scheme closure

The chancellor has indicated that the scheme will close at the end of October.