Schools are now heading back, the Government is urging office workers to return to the workplace and the closure of the furlough scheme is approaching. So what’s the latest on furlough leave? Here, we touch briefly on four practical points to keep in mind if you have furloughed employees under the Coronavirus Job Retention Scheme (the ‘Scheme’):
1. Support levels tapered down from 1 September
Since 1 September, the level of support provided by the Government under the Scheme has reduced, meaning employers now need to cover the cost of an extra 10% of furloughed employees’ pay (as well as the cost of pension contributions and national insurance contributions that employers have had to pay since August). Remember that furloughed employees are still entitled to 80% pay overall, subject to the cap.
From 1 October, the Government contribution will be further tapered down, so employers will need to cover 20% of furloughed employees’ pay plus the cost of pension contributions and national insurance contributions (subject to the cap). The Scheme is currently expected to close on 31 October 2020.
2. HMRC writing to employers who may have over-claimed under the Scheme
3. Approaching deadline for 45-day redundancy consultation while Scheme in place
4. ‘Plan for Jobs’ including Job Retention Bonus
The Government’s ‘Plan for Jobs’, which was announced in July, outlined proposals to boost job creation in the UK, including the introduction of a Job Retention Bonus. Under the bonus plans, employers will receive a £1,000 one-off payment for each employee they bring back from furlough and continuously employ through to January 2021.
For businesses to be eligible for the bonus, the employee will need to be paid at least £520 on average in each month from November 2020 to the end of January 2021 (equivalent to the national insurance lower earnings limit). Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.
The ‘Plan for Jobs’ also proposed further investment in traineeships and sector-based work academy placements, a £32 million investment in the National Careers Service and a doubling of Jobcentre work coaches. In addition, new apprenticeships will be supported by bonuses (employers will be entitled to a £2,000 payment for each young apprentice they take on under the age of 25 and £1,500 for those aged 25 or over) and a new "kickstart" job creation scheme will support 16-24 year olds on Universal Credit who are at risk of long-term unemployment.
How we can help
In addition, our experienced HR and legal consultancy experts can give you the confidence to manage a redundancy process effectively, saving you time and money. Click here to see how Make UK can help, including training your managers and representatives on their role.