The Government has confirmed that the furlough scheme will be extended for a further 5 months and will now end on 30 September 2021.
- Until 30 June 2021, the scheme will continue as it is now. The Government will contribute up to 80% of salary, capped at £2,500 per month, for the hours an employee is furloughed, with the employer paying NICs and pension contributions.
- For July 2021, the Government will pay 70% of wages, capped at £2,187.50, for the hours an employee is furloughed. Employers must pay NICs and pension contributions and top up to ensure employees receive 80% of their wages, subject to the cap of £2500, for the time they are on furlough.
- For August and September 2021, the Government will pay up to 60%, capped of £1,875 per month, for the hours the employee is on furlough. Employers must pay NICs and pension contributions and top up to ensure the employees receive 80% of their wages, subject to the cap of £2500, for the time they are on furlough.
This extension is welcome news for employees and businesses for two reasons:
- With the previous end date of 30 April, the deadline for starting mandatory collective redundancy consultation was less than 2 weeks away. Millions of furloughed employees will be relieved and businesses will now have time to plan ahead.
- It recognises that, although the Government’s roadmap anticipates COVID-19 related restrictions on business being fully lifted in England on 21 June 2021, it will take time for full economic activity to resume.
As Rain Newton-Smith, the Chief Economist of the CBI, said: “Extending the scheme will keep millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown.”
Please contact our employment lawyers for advice on furlough, redundancy and restructuring.