Budget 2021: The furlough scheme has been extended to September

The furlough scheme has been extended until the end of September 2021 following Chancellor Rishi Sunak’s Spring budget. The Job Retention Scheme otherwise known as furlough, has been extended to help all of the industries remaining closed until June 2021. This scheme has protected lots of jobs across the UK and has been a huge benefit to both employers and employees.

The scheme remains the same where employees will receive 80% of their current salary capped at £2,500 per month. In addition to this, the government has confirmed that newly self-employed people will now be eligible for support.

Has the scheme changed?

The furlough scheme covers 80% of employees wages for the hours not worked and employers are expected to cover National Insurance and pension contributions. The government will ask employers for a small contribution of 10% in July and 20% in August and September, this is towards the hours employees do not work.

Flexible furloughing is still in place and allows employers to bring back employees on furlough on a part-time basis. Employers must pay for any days worked by the employees however the days not worked can be claimed back from the government. Employees must have received a formal agreement surrounding flexible furloughing and a written record must be kept by employers.

Please note employees will receive 100% of their salary for the days worked and 80% of their salary for the days they are placed on furlough.

What to do if you have been dismissed prior to the announcement or recently left your jobs to start a new one?

If an employee was made redundant or left the company on or before the 23rd September 2020 then the government has confirmed that they can be re employed and placed on furlough. Employers must pay National Insurance and any pension contributions for the furloughed employee – This is the same for all employees placed on furlough.

What to do if you’re a director?

If you have a contract of employment with the employer and were on PAYE on or before the 30th October 2020 then you can furlough yourself. This can be challenging due to the responsibilities directors have during the current climate. All furloughed employees must not work for the company whilst on furlough.

If you are in need of any HR help or support when it comes to the furlough scheme. Please don’t hesitate to get in touch with our award-winning team of HR advisers.

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