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Furlough changes at the end of July

Earlier this month the Government announced that employers who bring workers back from furlough and retain them in employment until the end of January 2021 will qualify for a £1,000 bonus as part of the Government’s plan for Jobs 2020. July also has seen the start of a number of changes to the furlough scheme.

Throughout July, companies have been able to bring employees back to work for any amount of time and shift pattern whilst still being able to claim for any hours not worked via the Coronavirus Job Retention Scheme.

However, from August the furlough scheme sees further changes and it’s important you are aware of your responsibilities as an employer, as well as what you can or can’t claim for, or what you’ll be responsible for paying.

August

In August, the government will continue to pay 80% of furloughed employees’ wages up to a cap of £2,500 for the hours the employee is on furlough. However, unlike in previous months, employers will be required to pay National Insurance and pension contributions for the hours the employee is on furlough.

September

In September, the government will pay 70% of wages, up to a cap of £2,187.50 for the hours that an employee is on furlough. Again, employers will need to pay National Insurance and pension contributions and also contribute 10% of wages up to £312.50 for furloughed employees.

October

In October, the Government’s contribution to the wages of the furloughed hours of employees will drop to 60%, up to £1,875. Employers will contribute 20% of the employee’s wages, up to £625, for the hours they’re furloughed, as well as National Insurance and pension contributions.

Employers will still be able to choose whether to top up their furloughed employees’ 80% wage to 90 or 100% up until the scheme finishes at the end of October 2020.

As it stands, if an organisation is still unable or not ready to take their employee back full time from 1st November, they could consider consulting with employees to create new employment terms. This could be something that works for both the company and the employee (such as part-time hours, reduced pay or a mix of the two). If an agreement can’t be reached, some employers may have to start a redundancy process.

If you require advice or support on either the Coronavirus Job Retention Scheme or to ensure you’re adhering to all your responsibilities, we can help at Hegarty Solicitors. We know your business is important to you, and we will provide you with honest information and guidance that’s best for you and your business, but that also protects your reputation. Get in touch here.

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