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Flexible furlough and the end of the furlough scheme

On Friday evening, the Chancellor outlined the much awaited changes to the Coronavirus Job Retention Scheme (Scheme), which has already seen been used to furlough around 8.4 million employees in the UK with 80% of their wages paid by the government.

You can read the press release here.

In summary, the Chancellor announced that:

  • the Scheme will end on 31 October 2020;
  • 10 June 2020 will be the last day that employees can be placed on furlough under the current version of the Scheme;
  • from 1 September 2020, employers will only be able to recover 70% of wages (up to a cap of £2,187.50) via the Scheme but must top-up the payment to the employee to 80%;
  • from 1 October 2020, employers will only be able to recover 60% of wages (up to a cap of £1,875) via the Scheme but must top-up the payment to the employee to 80%; and
  • from 1 July 2020 employers will be able to bring furloughed staff back to work on a part-time basis.

It is important to note that the current version of the Scheme will close to new entrants on 30 June 2020 and that only employees who are currently furloughed (or have previously been furloughed) and for whom a claim has already been made to HMRC prior to 1 July 2020 can be furloughed under the new version of the Scheme.

The announcement by the Chancellor came as a welcome relief to employers who have been concerned that a sudden end to the Scheme would financially cripple businesses due to the abrupt sudden increase in wage costs caused by staff returning from furlough.

This tapered end to the Scheme will hopefully allow employers to gradually bring their furloughed staff back into the workforce and ramp up productivity before returning to business as usual.

If you have any questions about the Scheme or flexible furlough, please email or call our Employment Law team today on 0113 207 0000.

 

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Paul Kelly

Partner and Head of Employment
Employment Law
PKelly@LawBlacks.com
0113 227 9249
@PaulLawBlacks
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Paul Kelly Blacks Solicitors LLP