Finance

New furlough rules start today – what they mean for pay and working hours

Furlough was designed by the government, and introduced by Chancellor Rishi Sunak back in March. The measure, otherwise known as the Coronavirus Job Retention Scheme, was part of a wide range of actions taken by the government to offer financial help during the pandemic. Original rules stated the government would cover 80 percent of a person’s salary up to £2,500 to keep Britons in employment.

This is alongside National Insurance and pension contributions which are valuable to both employers and employees. 

The furlough scheme, while widely successful, is due to undergo a number of changes until it draws to a close in October.

The first change takes place today, and is the initial step in winding down the scheme which has cost the government a significant amount. 

Today, July 1, ushers in Stage Two of the furlough scheme, which is being dubbed as ‘flexible furlough’. 

READ MORE: Martin Lewis explains new furlough rules but offers warning

The government will still be contributing 80 percent of salaries up to £2,500 alongside the other working contributions familiar in the scheme. 

From today, only those who have been previously claimed for under the furlough scheme are eligible to continue under furlough.

This means those who haven’t been furloughed previously can expect to work from home or in their usual environment as normal. 

Another change is that from today onwards, there is no minimum furlough period.

This could lead to employers rotating their workers more rapidly on the scheme.

But the government also states furlough arrangements must cover a period of at least one week. 

Mr Sunak announced the changes recently, and spoke about kick starting the economy.

He said: “To protect jobs and help businesses decide how quickly to bring their workforce back, we are introducing a new, more flexible furlough.

“This is a critical part of our plan to kickstart the economy. The financial security of the furlough scheme has been a relief for many, but at the same time people want to work.

“No one wants to be at home on furlough. No one wants to feel unable to contribute. 

“We will develop new measures to grow the economy, to back business, to boost skills and to help people thrive in the new post-COVID world.”

In June, it was reported that one in four UK workers had been placed on furlough.

Some 8.9 million people had been affected by the Coronavirus Job Retention Scheme, with the cost skyrocketing.

The scheme was initially intended to draw to a close at the end of July, but was extended by the government to October.

More changes will take place from August to October, meaning employers will be required to take on more financial responsibility. 



Tags

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close