New government furlough scheme rules due on 12 June

The Chancellor, Rishi Sunak recently announced that the furlough scheme will change from Wednesday 1 July and will end after eight months on 31 October 2020.

The details are as follows:

Employer contributions

As anticipated, employers will be asked to make, what the government describes as a "modest contribution" to furlough costs:

• From 1 August 2020, the government will continue to pay 80% of the furloughed employee's salary (subject to the £2,500 cap), but employers will have to meet the cost of employers NI and pension contributions.
• From 1 September 2020, the government will pay 70% of the furloughed employee's salary (subject to a cap of £2,187.50) and employers will have to contribute 10%.
• From 1 October, the government will pay 60% of the furloughed employee's salary (subject to a cap of £1,875) and employers will have to contribute 20%.

Flexibility

From 1 July (one month earlier than previously indicated), employees will be able to return to work for part of their contracted hours and remain furloughed and receive furlough pay for the hours they remain at home. For example, an employee working five days a week, could work for two of those and be furloughed for the remaining three.

Other changes

The current furlough scheme will close on 30 June and new rules to help employers understand the changes will be published by 12 June. We will be reviewing these as soon as they become available.

The scheme will close to new entrants on 30 June and from this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June.This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current three week furlough period to be completed by 30 June

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