Partner Sue Dowling, head of our Employment Law team, confirms today's news that the "Furlough Scheme" has once again been extended by the Government.
On 17 December 2020, the Government announced that the Coronavirus Job Retention (“Furlough”) Scheme, is to be extended for a further month, until 30 April 2021. The Scheme had originally been set to end on 31 October 2020, before it was earlier extended until 31 March 2021.
Under the Scheme, Chancellor Rishi Sunak confirmed that the Government will continue to pay 80% of a worker's wages until the end of April, meaning that the Government's contribution will not be reviewed and reduced in January as some had expected.
Between now and 30 April 2021, employers will be able keep employees on furlough (be it full or part-time furlough) or to place staff on furlough (for the first time or to place staff on further furlough), again on a full or part-time basis.
As neither the employer nor the employee needs to have previously used the Furlough Scheme, employees who have not previously been furloughed can be put on furlough, with their consent, provided that the member of staff was on the employer’s PAYE payroll on 30 October 2020.
Employers will need to report and claim for a minimum period of seven consecutive calendar days.
Essentially the same arrangements will apply as applied in August 2020, so furloughed workers will receive 80% of their current salary for hours not worked, up to a maximum of £2,500 (gross). Employers will only be required to cover National Insurance (NI) and employer pension contributions. As per the previous Furlough Scheme, employers can decide to top up an employee’s wages.
Practically speaking, the planned Job Support Scheme, that had originally been due to replace the Furlough Scheme, has been superseded by the extended Furlough Scheme.
The Job Retention Bonus, a £1,000 one-off payment to employers who have brought back and retained workers for a minimum period (to be confirmed), will instead be replaced by a new “retention incentive” to be introduced at an “appropriate time”.
The Chancellor also confirmed that a Budget will take place on 3 March 2021, at which point he will "deliver the next phase of the plan to tackle the virus and protect jobs."
Specialist advice relating to the recent Furlough Scheme changes or any other employment aspect, for employees and employers, is available from our Employment Law team.
You may find our blog articles, 'Workplace Situations - How We Can Help You to Achieve the Best Outcome' ‘Redundancy FAQs – A Guide for Employees’ and 'What is a Settlement Agreement and What Should It Contain?', helpful.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
