Chancellor Rishi Sunak has announced that the furlough scheme, which was originally to run until the end of June 2020, will now be extended to October 2020.
12 May 2020
The scheme is to continue without any major changes until the end of July. However, due to the growing concerns as to the economic cost of the lockdown, measures will be introduced to ensure that the costs of the scheme are shared more equally with employers.
Workers who are furloughed will continue to receive 80% of salary, subject to a monthly maximum of £2,500, but from August 2020 there will be greater flexibility to support the transition back to work. It has been announced that from August onwards employers will be able to bring furloughed employees back part-time while sharing the costs. Full details will be published by the end of May.
Robert Holland, Employment Partner commented: “Whilst the extension of the scheme is good news for business, ultimately employers may still need to reconsider the various options for their workforce in August, given the increased contribution that will be required to keep the furlough scheme going. We await further details with interest!"
The new announcement coincides in time with the Prime Minister’s latest address to the nation regarding the slow easing of the lockdown and encouraging workers to return to their jobs if they cannot work from home. Please note however that workers based in Scotland should follow Scottish Government advice.
If you require any further guidance in respect of the scheme or other employment law matters, please get in touch with Robert Holland or Jim McMahon.