Winding Down of the Furlough Scheme

As many employers will be aware the furlough scheme will be coming to an end on 31st October 2020. As it winds down, employers who are using the scheme will be required to increasingly contribute to the cost of furloughing employees.

As a reminder, employers will be required to pay the following contributions towards furloughed employees’ 80% (subject to cap) furlough pay:

  • September 2020: The employer NICs and pension contributions on the furlough pay and 10% of employees’ pay, capped at £312.50. The government will pay 70% of employees’ pay, capped at £2,187.50.
  • October 2020: The employer NICs and pension contributions on the furlough pay and 20% of employees’ pay, capped at £625. The government will pay 60% of employees’ pay, capped at £1,875.

As furloughed employees can return to work on an agreed part-time ‘flexi-furlough’ basis the caps are proportional to the hours not worked. Employers will have to pay their employees for  hours worked.

Looking Ahead

As the scheme begins to wind down many employers will be reviewing their staffing needs and trying to plan as best they can. For some organisations, it may be possible to return / start to return furloughed employees to the workplace before the end of the furlough scheme, whether on their previous hours or under a flexible furlough agreement. If your organisation is one of these, it’s important to handle a return to the workplace sensitively and appropriately. If an employee raises any concerns regarding a potential return, it’s important to seek advice on the facts of your case before taking action. Where a flexible furlough agreement is needed, Kingfisher Professional Services Ltd can help.

Sadly, for some employers there may be a need to consider making redundancies once the furlough scheme ends, or in some cases sooner. This could for example be because of a proposed closure of part of the business e.g. one of an employer’s shops, or it’s expected that there will be an ongoing reduction in the need for employees to do work of a particular kind. If you think you may need to consider making redundancies in your organisation, please contact Kingfisher Professional Services Ltd as soon as you can for advice on the facts of your case. It’s important for employers to bear in mind that when proposing redundancies, it will usually be necessary to meaningfully consult with employees before redundancies are made as this may need to be taken into consideration in terms of timing.

If you are assessing the staffing needs in your organisation, or would like advice on any employment law matter, please contact Kingfisher Professional Services Ltd to discuss your situation.

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