Changes to the furlough scheme – what to look out for

The Government have set out how the Coronavirus Job Retention Scheme will be changing over the next few months. Here are the details you need to know about:

1. 10 June 2020 is the last date that employers can put an employee on furlough.
2. Originally scheduled for 1 August 2020, there will be a part time provision under the scheme from 1 July 2020. Employers and employees can come to an arrangement on how many days a week the furloughed employee will return to work. The employee will be paid 100% of their salary by the employer for the days they work. The Government will then pay the employee for the remaining days the employee is furloughed at 80% or the £2500 cap (pro rated to the proportion of time they are furloughed for). This part-time provision will last until the scheme is scheduled to end on 31 October 2020. Only those employees who have been furloughed for a minimum period of 3 weeks before 1 July 2020 will be able to use the part time provision. This is because the part time provision is aimed at bringing already furloughed employees back to work part time.
3. From 1 August 2020, employers will have to start paying National Insurance Contributions and Auto Enrolment Pension Contributions.
4. From 1 September 2020, employers will also be required to pay 10% of furloughed employees’ salaries, with the Government contributing 70% of wages up to a cap of £2,190.
5. From 1 October 2020, employers will be required to pay 20% of furloughed employees salaries, with the Government contributing 60% of wages up to a cap of £1,875.

Further Government guidance on these changes is being published on 12 June 2020.It will likely give us further detail and clarification on the changes and how they will work. We will update you further when it is published.