Covid-19 Employment Law Update – Chancellor Announces Changes to Furlough Scheme

Vina Madhavji considers recent developments under the Furlough Scheme and the Self-Employed Income Support Scheme.

The chancellor has announced  various changes to the furlough scheme which are set out below.

Last date to furlough an employee that has yet to be furloughed

The last date that an employer can furlough an employee that has yet to be furloughed is 10th June 2020.

From 30th June,  Employers will only be able to furlough employees that they have already furloughed for a full 3 week period prior to 30th June.

Staggered Payments Introduced

From August 2020, Employers will be required to make contributions towards payments to access the scheme.

Employees will continue to receive 80% of wages under the furlough scheme throughout its duration.

In June and July 2020, the government will continue to pay 80% of wages, capped at £2500, for those eligible under the scheme.

In August 2020, Employers will be required to cover national insurance and pension contributions to access the scheme and the government will pay 80% of wages capped at £2500.

In September 2020, Employers will be required to cover 10% of wages, and also national insurance and pension contributions, to access the furlough scheme; the government will pay the remaining 70% of wages capped at £2,187.50.

In October 2020, employers will be required to contribute 20% of wages and national insurance and employer pensions; the government will cover 60% of wages capped at £1,875.

The scheme will close at the end of October 2020.

Further information can be found here on the gov.uk website.

 

Flexible Furlough

Flexible furlough will be introduced from 1st July whereby employees can be brought back to work part-time.  This will replace the original furlough scheme.

Employees can be brought back for any time period and shift pattern. Employers will be able to make a claim under the furlough scheme for the employees normal hours not worked. Employers will need to make a report and claim for a minimum period of 1 week.

Further guidance on flexible furlough will be issued on 12th June 2020 and we will keep you updated.

 

Self-Employed Income Support Scheme (SEISS)

In August 2020, it will be possible to make an application for a second grant under the SEISS. For those eligible under the scheme, it will be possible to receive a grant of 70% of 3 months of average monthly profits up to a total of £6570.

You can still make an application for the first grant (for 80% of the average of 3 months trading profits capped at £7500) up until 13th July 2020.

Further information can be found here on the gov.uk website

If you need advice on any employment issue, contact Vina on 01254 31 12 82, email enquiries@watsonramsbottom.com, talk to us via live chat or alternatively complete our online enquiry form and one of our experts will contact you.

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