Flexible furlough scheme: when employers will have to make payment contributions for furloughed workers - and all the rule changes up to October
Employers will be required to start making payment contributions for staff on furlough in August, including National Insurance and pensions
Changes to the government’s furlough scheme took effect at the start of July, allowing employers to welcome back some workers part-time.
As of 1 July, UK employers were able to bring back furloughed staff to work for any number of hours or shift pattern, while still being able to claim the grant for any hours not worked.
Here are the key dates and changes to be aware of over the coming months.
What rules changed in July?
The July changes marked a positive step forward from previous rules, which prevented staff from undertaking any work for their employer while on furlough.
When staff are working as normal, their employer will be responsible for paying their wages.
However, if you are still placed on furlough for part of the week, the government will pay for your wages for the hours you have worked.
It means that employers who cannot afford to pay their staff a full wage will be able to welcome them back to work, without leaving them out of pocket.
The three week rotation rule was also scrapped in July, which states that if workers are placed on furlough, it must be for a minimum of three weeks, and the scheme closes to new applicants on 30 June.
The closure of the scheme means that only those who have already completed three consecutive weeks or more on furlough, between 1 May and 30 June, will be eligible for the scheme from July onwards.
As such, this means that you must have been enrolled on the scheme before 10 June to be able to continue on it.
Additionally, July will mark the final month that the government will cover other employer contributions, including National Insurance and pension contributions.
What other changes will be made?
When the furlough scheme, officially named the Coronavirus Job Retention Scheme, launched in March, the government promised to cover 80 per cent of workers’ salaries, up to a cap of £2,500 per month.
The scheme was put in place to help employers across the UK continue to pay their staff, even while their businesses were closed.
The 80 per cent salary payment continued throughout July, even if staff were still not working.
Employers could choose to top up these payments to ensure staff receive their full monthly wage, although it is not compulsory for them to do so.
However, this amount is set to reduce over the coming months, with employers expected to start contributing to payments.
Here are the changes that will be made in the next few months:
From August, workers will continue to receive 80 per cent of their wages, up to a cap of £2,500 per month, for the hours an employee is on furlough, but their employer will have to pay the additional contributions. This includes National Insurance and pensions.
From September, government contributions will drop to 70 per cent of staff wages, up to a cap of £2,187.50 per month, for the hours an employee is on furlough. Employers will pay the difference to bring the payment up to 80 per cent.
From October, government contribution will drop further to 60 per cent, up to a cap of £1,875 per month, for the hours an employee is on furlough. Employers will then pay the difference so that workers still receive the full 80 per cent of their wage.
On 31 October, the furlough scheme will come to an end.