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A SHAKE-UP to the government’s furlough scheme is expected to be announced by Chancellor Rishi Sunak at today’s coronavirus briefing.
Before the 5pm announcement, here’s everything we know as it stands – plus what we expect could happen.
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80 per cent of wages currently paid under furlough
Currently, the government foots 80 per cent of staff wages up to £2,500 a month under furlough, while it’s up to employers if they want to voluntarily contribute more on top.
Payments have been backdated for those who are eligible until March 1, and the government has committed to continue to pay this amount until the end of July.
Here’s how to claim furlough if you’re an employer.
Employers expected to start picking up furlough bill
Mr Sunak is expected to announce later today that employers will have to start footing some of the furlough bill from August.
We don’t know exactly how this will work, but it’s thought the government will end up paying 60 per cent of the bill with employers forced to contribute at least 20 per cent.
What is furlough?
THE aim of the government’s job retention scheme is to save one million workers from becoming unemployed due to the lockdown.
Under the scheme, the government will pay 80 per cent – up to £2,500 a month – of wages of an employee who can’t work because of the impact of coronavirus.
Workers will be kept on the payroll rather than being laid off.
The government will pay the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on top.
The scheme has been extended to run until the end of September (although businesses will be asked to chip in from August) and can be backdated to March 1 2020.
It’s available to all employees that started a PAYE payroll scheme on or before March 1, 2020.
If you’re between jobs, have started at a new place of work or were made redundant after this date then you can ask your former employer to rehire you to be eligible for the scheme.
Employers can choose to top up furloughed workers’ salaries by the remaining 20 per cent but they don’t have to.
Firms who want to access the scheme will need to speak to their employees before putting them on furlough.
While on furlough, staff should not undertake any work for their employer during the scheme.
It’s thought Mr Sunak may also today ask employers to pay national insurance and pension contributions for furloughed staff from August.
Currently, the government’s furlough scheme covers the cost of national insurance and mandatory workplace pension contributions on wages of up to £2,500 a month.
Part-time work for furloughed workers could be introduced
At present, staff who are furloughed cannot work for the same company while on furlough.
If your boss wants you to work, you have to be furloughed for at least three weeks before it reemploys you. And if it furloughs you for subsequent periods, these always have to be for at least three weeks.
Can I be made redundant if I’m on furlough?
EVEN though furlough is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.
But it doesn’t affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.
Your employer should still carry out a fair redundancy process.
You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.
How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:
- Half a week’s pay for each full year you were under 22,
- One week’s pay for each full year you were 22 or older, but under 41,
- One and half week’s pay for each full year you were 41 or older.
Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.
There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.
You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.
It’s thought the government may, however, confirm plans to allow furloughed workers to work for the same company part-time but with a smaller subsidy from the public purse.
Furlough could get an end date
The furlough scheme is due to end by October, although the government has said it will monitor this deadline.
But it’s thought Mr Sunak may place an end date on new workers joining the furlough scheme.
Shake-up could see workers made redunant
Workers are likely to still get paid the same wage regardless of any shake-up to the scheme – it’ll just be your employer footing more of the bill compared to the government covering all of it.
But an adverse affect of employers having to pay more is if they simply can’t afford to do so.
In this scenario, they may sadly feel they have no choice but to make workers redundant instead.
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