When does the Furlough Scheme end?

During the last several months, furlough became one of the most used words of 2020 when the Government launched a scheme to help people stay in employment during the coronavirus pandemic and subsequent lockdown. The furlough scheme – also known as the Government job retention scheme – allowed companies to place employees on leave while still keeping them on the payroll. 

However this scheme is now due to end on 31 October 2020 and will not be extended – but is being replaced by a Jobs Support Scheme. The Chancellor made the announcement, revealing that the scheme will allow businesses to keep employers on shorter hours, covering ‘two-thirds of the pay they have lost by reducing their working hours’.

What is the Job Support Scheme?

The jobs support scheme is a new scheme introduced by the government which will replace the furlough leave scheme from 1 November and will apply for a period of 6 months. The government’s hope is that it will minimise redundancies caused by a temporary downturn in work due to the Coronavirus.

Under the scheme, employees must work at least 33% of normal hours and will be paid as usual for the hours worked. The government and the employer will each then pay a third of the wages for the unworked hours, with the employee forgoing payment of the remaining third. The government’s contribution will be capped at £697.92 per month for each employee.

Large employers will only be eligible if their turnover has decreased as a result of the Coronavirus. Small and medium sized employers will be eligible whether or not their turnover has fallen.

Some of the key points that can be taken from the government’s factsheet are as follows:

• The “expectation” is that employers will not be able to top up their employees’ wages above the two-thirds contribution for hours not worked.
• Employees cannot be made redundant or put on notice of redundancy during while they are claiming under the scheme.
• Employees must be on the employer’s PAYE payroll on or before 23 September 2020 in order to qualify.
• The altered working hours must be agreed with staff, and changes to employment contracts must be notified to the employee.
• The government’s contribution will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.

Further guidance to the scheme will be published by the government in due course.