The government is keen to get people back into the workforce to help kick-start the economy, which is why this new phased approach has been used to support the transition to some degree of normality. The flexible working scheme is the first step, meaning employers can bring staff in as and when they need them, while still receiving help from the government.
As many business leaders will know, the government is currently paying 80% of worker salaries up to £2,500 a month under the Coronavirus Job Retention Scheme.
The scheme, which has supported more than eight million workers here in the UK so far, was launched in a bid to preserve the short-term impact of job losses and potential redundancies. It is widely regarded as one of the most substantial government bailouts in history.
Today (Wednesday 10 June), marks a key date in the lifecycle of the scheme, as it is the last day employers can place employees on furlough and is the beginning of a new “flexible” approach to the scheme.
What do these changes mean for businesses?
Employers will only be able to furlough staff members who have been furloughed for a minimum of 3 weeks prior to 30 June. This means that 10 June is the last day employers can place employees on furlough leave for the first time.
From 1 July, employers will also be able to place employees on ‘flexible furlough’ meaning employers will have to pay the employees for the time they work, and the government will top up their wage to 80% for the time they are not working. The employees’ work pattern must be agreed between the employer and employee.
A phased approach
From 1 August, employers will be expected to resume paying their employees’ national insurance and pensions contributions for those on furlough and will not be able to reclaim them through the scheme.
Following this, from 1 September the government will require employers to contribute 10% of their employees’ wages and they will continue to provide the other 70% under the scheme.
And, as of 1 October, government contributions will reduce to 60%, with employers contributing an additional 20%.
Underneath current guidance, the scheme is set to end on 31 October this year.
Kickstarting the economy
The government is keen to get people back into the workforce to help kick-start the economy, which is why this new phased approach has been used to support the transition to some degree of normality.
The flexible working scheme is the first step, meaning employers can bring staff in as and when they need them, while still receiving help from the government.
Despite all the information coming from the government, these changes are also raising many questions for business leaders, including:
- Will the deadline of 30 June mean employers who have been rotating staff through the furlough period be able to furlough staff after 30 June if they were furloughed earlier (for example, they were furloughed back in April but worked again in June)?
- What counts as ‘flexible working’?
- How many hours is part-time or full time? Are there any restrictions?
- How will the amount the government contribution towards flexible working be calculated?
We expect more answers to questions will be found when the government release further information on 12 June. However, in the meantime, if you have any questions on the furlough scheme or need your own questions answering then please do contact us on email@example.com.