Changes to the Covid Job Retention Scheme – otherwise known as the furlough scheme came into effect on 1st August.
Government 🏢 will pay 80% of wages, up to a cap of £2,500
Employers 👩💼 will pay ER NICS and pension contribution. For the average claim that represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
More changes to the furlough scheme are coming over the next few months:
❗️Employers to contribute 10% of wages plus ER NICS in September
* for average claim this represents 14% of gross employment costs had the employee not been furloughed*
❗️ Employers to contribute 20% of wages plus ER NICS Costs in October
* for the average claim this represents 23% of gross employment cost if employee had not been furloughed*
Many businesses have taken advantage of the “flexi-furlough” that has been permitted since 1 July 2020. This gave employers the flexibility to bring employees back from furlough part-time. The days worked are paid at 100% of salary by the employer. The days on furlough are paid under the CJRS by the government.
Flexi- furlough is a great way to phase employees back to work and to allow Employers to manage their costs and I expect many more to take advantage of it in the next few months.
BUT it is important that any changes to the furlough is agreed in writing as it can be seen as change to terms and conditions of employment. We always recommend in such cases these changes are put in writing and agreed by both the employer and the employee.
If you need help with any of this, please get in touch