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Last week, we reported on the changes to the Coronavirus Job Retention Scheme announced by chancellor Rishi Sunak. While the scheme will continue until the end of November, not all businesses are aware that the furlough scheme deadline for new entrants is in two days’ time.
From 1st July, the furlough scheme becomes more flexible. Currently, you have to furlough employees for three-week periods. During that time, they cannot work for your business. From next month, you can bring employees on and off furlough as needed. However, you can only do this for employees who have already been furloughed.
Furlough scheme deadline – time for decisions
This means that – if you want to include workers in the scheme after July – you need to make sure they have been furloughed before. If they have not yet been furloughed, you need to make sure they have been by this Wednesday, 10th June. This will allow them to spend the required three full weeks on furlough before the rule changes come into force.
It’s also worth noting that, from 1st July, you’re not permitted to furlough more staff at one time than you have in previous 3-week claim periods.
As this furlough scheme deadline is so close, you may well need to make decisions about your workforce over the next day. Chief among the things you’ll need to consider are whether you can afford to furlough staff.
Full government guidance on the scheme is available here. In brief, the scheme pays 80% of wages until the end of July. In August employers have to start paying employers’ pension and National Insurance contributions. From September the government subsidy drops to 70% and in October it falls to 60%. However, from July you can take employees on and off furlough to work for you. When they are working for you, you pay them their normal wages.
A word about holidays during furlough
One other factor you need to take into account is staff holidays. If an employee takes holiday during furlough, they will be entitled to full salary – so you’ll have to top up the furlough grant during these periods. You are allowed to offer employees time off in lieu, but you need to agree this with them.
What if you need to make redundancies?
Some employers will reluctantly come to the conclusion that the furlough scheme won’t be enough to avoid redundancies. If you do decide to make staff redundant, we strongly advise that you speak to an employment lawyer – especially if you are making more than 20 people redundant. In these instances redundancy consultation rules come into force, meaning you can’t make any dismissals for 30 days (or 45 days, if you are making more than 100 redundancies).
Hopefully, you will be able to avoid redundancies. If this relies on being able to take staff on and off furlough from next month, just be sure to meet the deadline for first entrants this Wednesday.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.