Furlough Scheme Update – Your questions answered

13
May

Yesterday the Chancellor announced that the Government’s Coronavirus Job Retention Scheme – established to pay the wages of workers on leave because of Coronavirus – will be extended to October, with new provisions intended to allow some workers to begin a partial return to employment.

As is often the case in the immediate aftermath of such announcements, further clarification is still required on some of the finer details of the revised scheme – including whether or not any provision will be made for the self-employed – however I thought it would be useful to summarise my thoughts on some of the most pressing concerns that have been raised with me since the news broke.

If you require further information on the basic principles of the Government’s Coronavirus Job Retention Scheme or the mechanics of Furlough Leave generally, please refer back to our earlier article on this subject which can be found on the Insights section of our website here.

 

How is the current scheme changing?

The most significant change to the scheme (aside from the 4-month extension) is that, from the start of August, businesses will be able to bring furloughed employees back on a part-time basis provided that they contribute towards the salaries of the furloughed staff.

Under the current scheme, all furloughed employees are prohibited from working at all, so the only way for a business to retain their services is to keep them on full pay.

 

I am currently on furlough leave – will I continue to receive 80% of my monthly wages?

Yes.  There was some speculation that the rate may be reduced by the Government but the Chancellor has confirmed that employees will continue to receive 80% of their monthly wages up to £2,500.00. 

This is the case whether you remain furloughed at home or are asked to return to work part-time.

 

How will the employer contribution work in practice?

As confirmed above, the 80% pay level will remain, but where businesses wish to start bringing staff back on a part-time basis, they will be required to contribute to that rate. 

At this stage, we still await further details of what this contribution might be but it could be the case that the employer is asked to pay 20% of the furloughed employee salary with the Government making up the remaining 60%.

 

We will of course continue to monitor the changing climate and provide legal updates wherever possible.  Should you require any further advice in respect of employment-related matters please contact Jonathan Moreland by email jmm@swinburnemaddison.co.uk or by telephone on 0191 384 2441.

 

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