Further extension of the furlough scheme to 30 September
The budget announced on 3rd March 2021 confirmed that the Coronavirus Job Retention Scheme or Furlough will continue until 30 September. The scheme covers up to 80% of an employee’s salary for the hours they do not work, up to a maximum of £2,500 per month.
The basic rules of the furlough scheme, including who is eligible, flexible furlough and how to claim remain the same. For more information see: Furloughed Workers
Tapered end to furlough scheme starts on 1 July 2021
From July 2021, employers will have to contribute 10% to the wages of employees on furlough and the government will reduce their contribution to 70%. In September and October 2021, the government contribution will reduce again to 60% and employers will be required to contribute 20%. This is set out in tabular form below:
|Government contribution to wages of fully furloughed employee||80% up to £2,500||70% up to £2,187.50||60% up to £1,875|
|Employer contribution to wages of fully furloughed employee||No||10% up to £312.50||20% up to £625|
|Employee receives (if fully furloughed)||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month|
You will note that an employee on furlough continues to receive up to 80% of his wages. As before, the employer can top this up, typically to 100% of wages and the possibility of flexible furlough remains.
Employers have been paying for the pension and National Insurance contributions since August 2020 and this will continue.
According to the BBC, 11.2 million jobs have been supported by the scheme since March 2020. About 4.7 million people are currently on furlough. The highest take-up rate has been in hospitality (food, drink and accommodation) industries, where 1.2 million jobs were furloughed as of 31 January. Four out of 10 employers are using the furlough scheme. Furlough has cost the Treasury almost £50bn so far. However, the price of not extending it would probably be a further rise in unemployment, which has already reached a rate of 5.1%.
The government in England has said all areas of the economy – including all shops, pubs and restaurants – will fully reopen by 21 June at the earliest. Other parts of the UK have their own plans for easing lockdown. The furlough scheme was due to finish at the end of April, but the sectors that rely most on furlough would not be fully open by then. More than a million food and accommodation workers were on furlough at the end of January, as were 938,000 in the retail sector.
Under the government’s lockdown roadmap for England, gyms, hairdressers and non-essential shops will reopen by 12 April at the earliest. Pubs and restaurants can serve customers outside if lockdown is eased at this time. But restrictions on household mixing will remain. Indoor hospitality venues such as hotels, cinemas and theatres won’t be able to open until at least the middle of May.
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Justin deals with all aspects of Dispute Resolution for both businesses and individuals, including including Contentious Probate, Employment Law ( for both businesses and individuals) and Commercial Litigation. This means that he is familiar with the many different courts and tribunal as well as the many different methods for resolving disputes, including alternative dispute resolution such as adjudication and mediation.