On the 3rd of March 2021, Chancellor of the Exchequer, Rishi Sunak delivered the Spring 2021 budget. The MP mentioned that the Coronavirus Job Retention Scheme, which was originally meant to end on 30th April 2021, has now been extended to the 30th of September 2021.
Following the announcement regarding the extension of the furlough scheme, this then meant that the scheme will have been in place for an overall 19 months. Where throughout this period, all employees placed under furlough will have remained entitled to be paid 80% of their normal wages, this being capped at £3,500 per month. However, from July 1st, 2021, employers will be required to contribute towards the cost of unworked hours. From July 10 % of the employee’s wage must be contributed and in the following months of August and September employers must pay 20% of the wage. As with the current rules governing the furlough scheme, employers will continue to be required to pay employer National Insurance Contributions and pension contributions on furlough payments.
According to the latest government statistics, approximately 4.7 million employees are currently on furlough. The most affected are employees in the retail and hospitality sector, where about 1.15 million employees were put onto the furlough scheme. Even though in the UK normality is slowly coming back into our sights, employers are still using the scheme to ensure that they do not lose their staff during this time.
All employers with the UK, Isle of Man or Channel Islands bank account and UK PAYE scheme will be eligible to furlough if they are unable to maintain their workforce because of the effects the coronavirus pandemic has had. As the scheme states employees on any form of contract will be eligible for furlough. To include an employee in a claim for furlough, the employer must have included that employee on their payroll by specific dates. Being on the payroll means that HMRC has received an RTI submission reporting a payment to the employee by the employer by the required date.
Solicitors Specialising in Employment Law
The purpose of the furlough scheme was and continues to be to decrease the need for redundancies. Unfortunately for various reasons, including the decrease in consumer spending, there have been and will continue to be job losses.
At Larcomes our Employment Law team offer a comprehensive employment law advice service for employees who might be dealing with difficult legal issues in the workplace. So, if you need advice on the Coronavirus Job Retention Scheme or are considering the need for redundancies, then please contact our specialist employment law department today on 023 9244 8100 for fast advice that is friendly and local.