The furlough scheme has saved jobs, however as the economy starts to recover and restrictions are lifted furlough will come to an end. This means many employers may have to make critical business decisions before 30 September 2021.
From 1st July employers will need to start contributing to the costs of keeping their staff on furlough.
The monthly limit of £2,500 will stay in place, so workers will not be any worse off, however, it will be more expensive for employers to keep staff on furlough leave.
By making furlough more expensive for employers, the government hopes to encourage them to take workers back full-time if they can, and only furlough those they have to. However, some employers may make the decision to make staff redundant sooner.
Employers already have to pay their employees’ pension and National Insurance contributions.
Furlough has already been extended four times, therefore it is unlikely to be extended again, especially given that the restrictions will be fully lifted on 19 July.
Businesses will still have the option to bring staff back to work on a part-time basis, known as “flexible furlough.”
This option will allow employers to only pay for the hours the staff is needed, while continuing to receive the furlough payment for hours not worked by the staff. This is calculated by reference to their usual hours worked in any claim period.
If you decide to put staff on flexible furlough, discuss it with them and agree on the days/hours. Employers must ensure that any agreement is confirmed in writing.
To talk to an Employment Solicitor about redundancies, furlough agreement and managing furlough please email contact@davenportsolicitors.com or call us on 0207 903 6889.
