Furlough was introduced by the Chancellor Rishi Sunak as part of a range of government measures designed to help those affected by the pandemic. Under original rules, the government pays 80 percent of a person’s salary up to £2,500 alongside National Insurance and pension contributions. This was done in order to stop the numbers of unemployed people surging, and to provide extra financial support for the many workers forced to remain at home.
This means that for some workers, pay could increase, providing them with a well needed financial boost at this difficult time.
From July 1, only employees that have been previously claimed for under the Job Retention Scheme will be eligible to continue on furlough.
These people must have been furloughed for at least three consecutive weeks anywhere between March 1 and June 30.
From an employer’s perspective, claims up to June 30 must be submitted prior to claims from July 1 2020, due to the maximum numbers an employer can claim for.
And the last day employers can submit claims for periods ending on or before June 30, is July 31, so there are more deadlines to follow.
There is no minimum furlough period from July 1 onwards, meaning employers could rotate employees on furlough more rapidly.
But any furlough arrangement must still cover a period of at least one week.
Later in the year, from August 1, the level of the grant is due to be slowly reduced, until the scheme finally comes to an end in October.
While employees will still be paid 80 percent of their salary up to £2,500 in August, an employer will have to meet National Insurance and pension contributions.
From September, employees will only receive 70 percent of wages up to £2,187.50, with employers required to meet 10 percent.
Finally, in October, the government will only pay 60 percent, with employers meeting 20 percent for their furloughed workers.
Announcing the changes to the scheme, Mr Sunak said the help from the government was unprecedented.
He added: “To protect jobs and help businesses decide how quickly to bring their workforce back, we are introducing a new, more flexible furlough.
“This is a critical part of our plan to kickstart the economy. The financial security of the furlough scheme has been a relief for many, but at the same time people want to work.
“No one wants to be at home on furlough. No one wants to feel unable to contribute. We will develop new measures to grow the economy, to back business, to boost skills and to help people thrive in the new post-COVID world.”