WITH businesses gradually opening in the UK and Brits returning to work, the furlough scheme is becoming less used.
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What is the government furlough scheme?
Simply put, if your employer has been forced to close temporarily due to coronavirus, they can use an online portal to claim 80 per cent of your wages, which it will then pay to employees.
Claims are, however, capped at £2,500 a month for each employee, so if you usually earn a lot more than that you’ll see a bigger drop in wages.
Your company can top up the remaining money you’d usually be paid, but most businesses are taking a serious hit and have chosen not to.
Bosses can also claim employer national insurance contributions and minimum automatic enrolment pension contributions on top.
How does the furlough scheme work?
ANY UK organisation with employees can apply, including businesses, charities, recruitment agencies and public authorities.
It’s up to your place of work to apply to the scheme, meaning you won’t need to contact the government yourself.
To access the scheme, your employer must comply with the following:
- Designate employees who cannot do their jobs due to the coronavirus measures put in place by the government
- Notify those employees of their new “furloughed” status
- Submit information to HMRC about furloughed employees to set up a system for reimbursement and about existing systems that will facilitate payments
To be furloughed, you must have been on a payroll on March 19.
Workers can ask previous employers to rehire and furlough them, even if they left for another job, but firms don’t have to do this.
The Coronavirus Job Retention Scheme is not supposed to be used for short-term sickness and there is a three-week minimum furlough period.
Furlough leave can be backdated to March 1.
When will the furlough scheme end?
The government then announced on April 17 that it would be extended by a month until the end of June, 2020.
Chancellor Rishi Sunak has now extended the scheme for four months until the end of October, although funding will be reduced from July.
The ONS estimates it’s costing around £8billion a month – but the Chancellor said the scheme would continue unchanged until the end of July.
It means employers will have to promise to top up the rest of the workers’ wages to 80 per cent from July onwards to continue to take part in the scheme.
The scheme was initially extended over fears that many struggling companies would have to lay off staff without the security of government-backed cash.
Under current employment laws, companies have to give 45 days notice before cutting roles.
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Earlier in April, the qualifying date of the scheme was extended from February 28 to March 19 – benefitting up to 200,000 extra workers.
But thousands of workers are missing out on furlough pay due to a loophole.
We’ve put together a guide to how furlough affects you, including pay, annual leave rights and how it works if you’re on maternity or sick leave.