Coronavirus - How Will Changes to the Furlough Scheme Affect Charity Employees?
Since its introduction in March, the Government's Coronavirus Job Retention Scheme has acted as a financial lifeline to many employers, charities included. But what is going to change?
The Chancellor has announced that the Scheme will start to change from 1 July 2020 with the introduction of 'flexi-furlough' and the tapering off of the support provided by way of the Scheme grant.
Detailed guidance as to how the revised Scheme will operate from July onwards is expected in the coming days, but here is what we know.
From 1 July, employers will be able to ask their furloughed staff to undertake some work part-time whilst remaining on furlough (flexi-furlough). It is anticipated that employers will need to pay staff in full for the part-time hours and can then recoup pay up to the relevant limits (ie 80% in July) for the furloughed element.
Although employees who are furloughed should receive no less than 80% of their normal pay (capped at £2,500) for the duration of the Scheme, employers will have to start meeting some of the costs of the Scheme from 1 August as follows:
- From 1 August, employers will no longer be able to claim for the employee's national insurance contributions and pension contributions.
- From 1 September, employers will only be able to recoup 70% of salary (up to a maximum of £2,190), so will need to contribute 10%.
- From 1 October, employers will only be able to recoup 60% of salary (up to a maximum of £1,875) so will need to contribute 20%.
The Scheme is currently due to cease entirely on 31 October.
To support the Government's wider aim of encouraging furloughed workers back to work, the Scheme will close to new entrants from 30 June. This means that if the employee was not furloughed by 10 June in order to complete three weeks of furlough by the 30th, their employer will not be eligible for a grant under the Scheme to recover their salary.