Coronavirus: What happens when the furlough scheme ends?

Coronavirus: What happens when the furlough scheme ends?

Nursery worker Image copyright Getty Images

More than nine million workers who are unable to do their job because of the coronavirus outbreak have had their wages paid by the government.

The furlough scheme was designed to help people put on leave because of the outbreak, and prevent mass redundancies.

Firms start paying towards the scheme from August. It will close in October, with employers receiving a £1,000 bonus for every furloughed worker they keep on until January 2021.

So, if you've been put on furlough, what are your rights?

How is the furlough scheme changing?

Under the Coronavirus Jobs Retention Scheme, workers placed on leave will continue to receive 80% of their pay, up to a maximum of £2,500 a month.

These furloughed employees can now go back to work part-time.

For example, an employer could pay someone to work two days a week, while the furlough scheme would cover the other three days not worked.

Image copyright Getty Images
Image caption Chancellor Rishi Sunak has said employers must start sharing the cost of the scheme from August

From 1 August, employers will have to pay National Insurance and pension contributions for their staff.

In September, employers will have to pay 10% of furloughed employees' salaries – rising to 20% in October.

Chancellor Rishi Sunak confirmed the scheme will close at the end of October, but has acknowledged this will be a ''difficult moment'' and that some jobs will not be protected.

Can I be made redundant while on furlough?

Yes. Employees can be made redundant at any point during the scheme, and there are concerns there may be significant job losses when it ends.

To encourage job retention, the government will pay businesses a £1,000 bonus for every furloughed employee they keep on until the end of January. These workers must be paid an average of at least £520 a month between November and January.

If a worker does lose their job and is entitled to redundancy pay then this is calculated based on the amount they earned before furlough.

Firms can't use the money from furlough to subsidise redundancy packages. If you're made redundant while on furlough because your firm has gone bust, you can apply for payments from the Insolvency Service.

Can I work if I've been furloughed?

When the scheme began, furloughed staff weren't able to do any work for their employer. However, they can now be brought back to work on a part-time basis.

This coincides with the reopening of the hospitality sector in England, which was particularly badly hit by the lockdown. Some furloughed staff will be able to return to work at pubs, bars and restaurants when they open to the public in England on 4 July.

In the meantime, those on furlough can volunteer in the community or even for their company as long as they aren't creating revenue or providing a service.

Image copyright Getty Images
Image caption Furloughed workers can volunteer in the community

Employers can give employees additional training, but must top up furlough payments if they do not reach minimum wage for the period spent doing the training.

If you work for more than one firm, you can receive furlough from any of them, up to £2,500 a month per employer.

You can continue working for any that still need you or start working for a new employer, provided you are not breaching any existing contracts.

How popular has the scheme been?

The take-up has been significant, with 9.3 million workers furloughed since March.

Employers had made £25.5bn of furlough claims by 28 June, and the scheme will cost the government an estimated £80bn in total.

The scheme covers full-time, part-time, flexible, zero-hour and agency workers if they were on their employer's PAYE payroll on 19 March 2020.

Workers must be furloughed for at least three weeks, and can be furloughed more than once.

Image copyright Getty Images
Image caption Employers can use an online calculator to work out how much to claim

How can my business apply?

Check you are eligible for the scheme, and then work out how much to claim using the government's online calculator.

Companies can claim 80% of their employees' wages – capped at £2,500 per employee per month before tax, or £576.92 a week.

Employers can top up this pay if they wish, and must let workers know they have been furloughed.

If employees' pay varies each month, companies will need to calculate the claim manually, or seek professional advice.

Furlough covers overtime and commission payments built into an employee's salary, but not discretionary payments such as tips or optional bonuses.

HMRC will check the claim, and pay you through a UK bank within about six working days.

Image copyright Getty Images
Image caption Apprentices can be furloughed and continue their training

Any UK organisation with employees can apply, but most claims are from private sector businesses and charities.

Apprentices can also be furloughed and continue their training. An individual can furlough an employee, such as a nanny, if they are paid through PAYE.

The self-employed who are adversely affected by the virus are eligible for a taxable grant of up to 80% of their average monthly profit, if they meet certain conditions.

They must have been self-employed since at least the start of April 2019, and earn an average of less than £50,000 in a tax year. Those who receive it can continue to work.

The grant is offered as a one-off payment covering three months, up to a maximum of £7,500. Applications for a second grant will open in August.

Will I still get sick pay and a bonus?

Anyone on furlough retains the same employment rights. If you are ill you are eligible for statutory sick pay or can be placed on furlough.

If you are on unpaid leave, shielding or have caring responsibilities, you are also eligible. Staff on parental leave will still receive statutory pay from the government.

Employers do not have to top up salaries that no longer reach the minimum wage.

Original Article

Leave a Reply

Your email address will not be published. Required fields are marked *