Financial help for employees during the Coronavirus pandemic
On 03 March 2021, the Chancellor, Rishi Sunak, announced that the furlough scheme will now run until 30 September 2021 instead of 30 April 2021. This is the fourth time the scheme has been extended, and will hopefully protect as many jobs as possible as the UK continues to gradually ease restrictions into the summer months. There have been some important changes to how the scheme works.
Those on furlough will continue to be paid up to 80% of their wages up to £2,500 for hours not worked until the scheme ends.
Wages will be paid in full by the government up until 30 June 2021, although employers will have to cover any pension or National Insurance costs.
From July 01, the government will reduce this by only covering 70% of an employee’s wages up to £2187.50 a month, with employers required to cover the remaining 10%.
From August 01, the government will reduce this again and only cover 60% of an employee’s wage up to £1875 a month, with employers required to cover the remaining 20%.
Am I eligible for the Employee Job Retention Scheme?
- The scheme is open to all UK employers. To be eligible, you have to have been on your employer’s payroll on 30 October 2020.
- Any organisation with employees can apply, even if they haven’t done so before. If your employer hasn’t done so yet and your job looks as though it could be at risk, you can ask them to do so.
- If you’ve been made redundant or left your job voluntarily after September 23 2020, then you can be rehired and put on furlough. Your employer has to have made a Real Time Information payroll submission for you on or before 23 September 2020 for this to happen.
- If able to do so, your employer can choose to top up your wages to 100% but they do not have to (subject to employment law and renegotiating any contractual entitlements).
- If your pay varies, your employer can claim for the higher of either the same month’s earning from the previous year.
- The scheme covers full-time and part-time employees, employees on agency contracts and employees on flexible or zero-hours contracts. If you’re classed as being extremely clinically vulnerable to coronavirus and have been advised to shield, your employer can put you on furlough if you can’t work from home.
- You will be put on ‘Furlough leave’ and will be unable to work for the agreed period of time. You won’t be able to work for the hours that you’re furloughed, but you will be able to work part-time and have the rest of your hours covered by furlough payments if your employer offers you part-time work. You can also work another job or do volunteer work elsewhere while you’re furloughed if your contract allows this.
Who won’t qualify for Furlough leave?
- Employees on sick pay or self-isolating cannot be furloughed but can be furloughed afterwards.
- Employees on maternity (or similar) leave can continue to draw Statutory Maternity Pay (SMP) (or similar) payments. The guidance does not prohibit women on maternity leave agreeing to return to work early and then being furloughed or electing to change to shared parental leave and then being furloughed.
What happens when I’m on Furlough leave?
- Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding.
- Furlough leave can be rotated amongst employees, provided each employee is off for a period of at least three weeks.
- You must not work at all during this time, even for an hour, in order to be eligible. However, you are able to undertake training and do volunteer work, provided you do not provide services to or make any money for your employer.
- When agreeing changes in hours (and acceptance of 80% pay), assuming the contract does not already allow for that, normal employment law applies.
- Your employer can only claim once every three weeks; that is, they cannot get weekly reimbursement.
Further details can be found at: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
I’m an employer – how can I support my employees on Furlough leave?
While on Furlough, employees can get up to 80% of their salary, up to a monthly cap of £2,500. In addition to this, there are a few measures that individuals can take to maintain their financial wellbeing, like completing a monthly budget planner, saving on bills and subscriptions and having access to free debt advice, should they need it.
Download our guide on supporting employee’s financial wellbeing while on furlough leave and send this to your employees. If you need any additional support or information, please contact our Partnership Team for further content.
DOWNLOAD: PayPlan financial wellbeing for employees on furlough guide