The Government announced in Parliament today (12 May) that the Coronavirus Job Retention Scheme (the Scheme) will be extended for four months until the end of October for all sectors. To read the comment on the extension from Stephen Phipson, Make UK’s CEO, click here.
The level of support that furloughed employees will receive will remain the same during the extension. Currently, employees are entitled to receive 80% of their normal wages, up to a monthly maximum of £2,500.
From August, employers will be asked to pay a contribution towards the cost of this furlough pay. Currently, employers can reclaim the entire 80% of normal wages (subject to the cap) from Government under the Scheme (provided eligibility requirements are met). Though the Government press release refers to employers ‘substituting’ the Government contribution, in Parliament, the Chancellor referred to employers ‘sharing’ the cost of the Scheme. We await confirmation of what this will mean in practice.
From August, there will be more flexibility in the Scheme to support the transition back into work, with employers being able to bring employees back on a part-time basis whilst still remaining in the Scheme. It is not clear what this will mean for levels of furlough pay.
More guidance will be provided by the Government by the end of May.
How we can help
We will keep you updated via our FAQs as more details of the amendments to the Scheme emerge.
The extension of the Scheme is timely for those employers who were considering whether redundancies might be required on the expiry of the Scheme (which was previously set as 30 June). If, despite this extension of the Scheme, you are considering redundancies or are concerned that they may become necessary in the future, you may find it helpful to attend our Redundancies in the context of Covid-19 webinar. This webinar takes a look at how the practical and legal aspects of a redundancy exercise are affected by the Covid-19 pandemic. Click here to find out more and book your place.
Members can contact their named adviser or the National Advice Line on 0333 202 2221 for legal advice on specific queries.
During the Covid-19 crisis, we are also offering non-members access to our HR and Employment Law Helpline on a monthly subscription basis. To sign up for a one month subscription, call us on 0808 168 5874.