UK Coronavirus Job Retention Scheme Update – Changes and Timelines

The current UK Job Retention Scheme scheme was announced by the UK Chancellor in March 2020. Latest figures show that since the start of May the number of furloughed employees has risen by 25% to reach 8.4 million workers at a cost of around £15 billion.
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UK Furlough Scheme
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The UK’s plan to unwind the furlough scheme

The current UK Job Retention Scheme scheme was announced by the UK Chancellor in March 2020.

Latest figures show that since the start of May the number of furloughed employees has risen by 25% to reach 8.4 million workers at a cost of around £15 billion.

On Friday the 29th of May the UK Chancellor Rishi Sunak announced that the furlough scheme will start to wind down from August.

Changes happening in the wind-down of the Furlough scheme in the UK

June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not obliged to top up salaries

August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.

October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed

Impact on employees and employers

While it doesn’t affect employees directly, there could be serious consequences moving forward. If your employer needs to start paying for you to work again there’s a chance the increase of labour costs tip over the edge and force employers to make redundancies.

Scheme cut-off deadlines

The Furlough scheme will close to new applicants at the end of June 2020. Employers wishing to use the furlough scheme must place employees on furlough by the 10th of June to allow time for the minimum three -week period.

Non-essential retailers will start to open from 15th June as announced by the prime minister on 25th May. Businesses will need to try and predict the level of demand expected and set employee levels.

Bizimply can help to build-out schedules in line with predicted sales forecast to help our customers hit their KPI’s. This will be vital to ensure we bring employees back at the right time and help make decisive decisions.

What do the new Flexible Furloughing rules mean for business?

From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part-time, this is being called ‘flexible furloughing’ scheme. Staff can start working part-time and have their additional salary topped up by the scheme. The employer will decide hours and shift patterns and individuals will continue to receive 80% of their normal salary but the employer must also ‘agree’ this work pattern with the employee. Best practice dictates that these agreements are made in writing and stored safely. Bizimply allows the secure categorisation and filing in employee documents.

We at Bizimply also strive to keep up to date on the Coronavirus Job Retention Scheme’s latest developments. Don’t hesitate to contact us by phone, email or social media if you have any questions:

Phone:

(UK) +44 203 642 5644

(IRE) +353 (1) 254 2524

Email: support@bizimply.com

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