Extension of the furlough scheme ...

On 12 May 2020, the Chancellor Rishi Sunak set out a brief update in Parliament on the future of the Coronavirus Job Retention Scheme. The scheme was set up on 26 March and supports employers by paying 80% of a furloughed worker’s pay up to a cap of £2,500 per month.

The Chancellor’s recent announcement came as a result of an urgent question in Parliament and confirmed that the scheme is being extended for another four months, to the end of October 2020.

For the next two months, until the end of July, the scheme will remain in its current form across all regions and sectors in the UK economy, but from the start of August, there will be two significant changes:

1. Workers will be able to return to their jobs part-time, with employers still receiving support under the scheme; and 2. Employers will be required to pay towards the salaries of their furloughed workers.

The announcement made clear that the 80% pay level will remain, but that the level of contributions employers will be asked to make to their furloughed worker’s salaries to replace the current level of government funding is not yet specified.

More detailed guidance on the changes to the furlough scheme are anticipated by the end of the month.