Opinion

Furlough update: Darren Sherborne, of Sherbornes Solicitors

Written by: Darren Sherborne, of Sherbornes Solicitors | Posted 03 June 2020 17:58

 Furlough update: Darren Sherborne, of Sherbornes Solicitors

Many will be aware the Government announced how the furlough scheme will change over the coming months, in that employers will be required to contribute to payment. In case you have missed this, the changes are detailed below.

What you may not have realised is that in order to be able to a claim under the furlough scheme on or after 1 July, the employee must have been furloughed for a full 3-week period prior to 30 June.

That means that the last date for furloughing an employee for the first time is 10 June 2020.

For those employees who are furloughed from 1 July, employers will still be able to claim 80 per cent of wages, up to the £2,500 cap, for time spent on furlough but it will be possible for employees to return to work on a part time basis. Any work that an employee does must be paid at 100 per cent of salary by the employer.

From 1 August, employers will be required to pay employer’s national insurance contributions and pension contributions, although the government will still pay 80 per cent of wages.

The scheme changes again from 1 September in that employers must also pay 10 per cent of wages to employees, with the government only paying 70 per cent, with a cap of £2,187.50.

From 1 October, employers must pay 20 per cent of wages, with the government paying 60 per cent, with a cap of £1,875.

The scheme ends completely at the end of October, at which time employers will either need to allow employees to return or place them on lay off or agree short time working (if they have the right to do so or the employee agrees).

Details of the changes and the guidance to employers can be read HERE and HERE.

This update is correct as at June 3, 2020, but there may be further changes and updates.

Darren Sherborne is a director and head of employment at Cheltenham-based law firm Sherbornes Solicitors Ltd.

For more information call Sherbornes Solicitors on 01242 250039 or visit www.sherborneslaw.co.uk.