Government announces extension of furlough scheme

With news of the imminent month-long national lockdown in England announced over the weekend, the Government has now backtracked on its previous plans and decided to continue the furlough scheme for an extra month, to support businesses and employees.

The amended rules will apply across the whole of the UK and not just in England.

With all the recent changes to the job retention and job support schemes, it is a confusing and challenging time for businesses and employees alike. However, this news will no doubt be welcomed by both.

Our head of employment law, Daniel Wilde, has compiled some key points to note from this latest announcement:

1. As before, the furlough scheme will allow eligible employees to receive 80% of their salary, subject to a monthly salary cap of £3,150;

2. The scheme is more generous than that applied in October, with the Government contributing up to 80% of the employee’s salary, subject to a cap of £2,500. The employer only has to pay employers’ national insurance contributions and enrolment pension contributions on the Government’s contribution;

3. The scheme applies whether the employee is furloughed for all or some of their hours and employees can continue to be furloughed flexibly;

4. To participate in the scheme, employees need to have been on the employer’s real time HMRC payroll as at 30th October 2020;

5. Employees do not need to have been on furlough previously to be able to participate in the scheme;

6. The new Job Support scheme has been deferred until the continued furlough scheme ends.

There has been political outcry in Wales over the fact that the furlough scheme has only been extended now that a national lockdown in England has been announced, despite repeated requests from the Welsh Government to the Treasury for additional job support measures to be introduced in Wales when the all-Wales lockdown began.

However, despite the ongoing political furore and the uncertainty that lies ahead, this news will at least provide some financial reassurance to both employers and employees across the UK over the coming weeks.

If you are an employer and need some employment law advice amid all the changes relating to the ongoing pandemic, please contact Daniel Wilde, Head of the Employment Team at Harding Evans on wilded@hevans.com, 01633 760662 or visit www.hardingevans.com.