The furlough scheme is still paying the wages of around two million workers in the UK as the UK government begins the process of winding down the scheme in September.
Chancellor Rishi Sunak extended the Coronavirus Job Retention Scheme for six months in his Spring Budget announcements after Covid-19 lockdowns forced him to keep the scheme running.
But while employees receive 80 per cent of their wages for employees until the end of September, employers are now being asked to pick up more of the bill. As of August 1, the monthly cap on the money paid to employees has dropped from £1,875 to £2,187 while employers are required to pick up 20 per cent of wages while the government’s contribution falls to 60 per cent for hours not worked.
Since March 2020, more than 11.6 million people have been supported through the furlough scheme and 1.9 million people and 540,000 employers are still relying on furlough as of June 30 2021. More than £67 billion has been paid to employees through the scheme.
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Sunak had been planning to end the furlough scheme altogether on October 31 2020 as Covid-19 cases dropped during the summer, introducing a Job Support Scheme instead – a less generous system paying workers in “viable” jobs up to a third of their wages has been put on hold.
But the second wave of cases in the autumn forced the Chancellor to scrap those plans and the furlough scheme is proving to be a lifeline once more in early 2021 as all four nations of the UK started the new year in lockdown with non-essential businesses closed.
The scheme’s job-saving intervention has been hailed by Sunak. Speaking during his Spring Budget, the Chancellor said: “We will continue doing whatever it takes to support the British people and businesses through this crisis.
“The government is proud of the furlough, one of the most generous schemes in the world.”
Here we lay out exactly what’s ahead for those on furlough from their job and what your rights are if your job is at risk.
The Big Issue’s Ride Out Recession Alliance is committed to helping people stay in work, keep their homes and ultimately prevent a tidal wave of Covid-19 homelessness this winter.
How is furlough changing?
The Job Retention Scheme will now last until the end of September with the government paying up to 80 per cent of workers’ wages (a maximum of £2,500 a month) through the furlough initiative designed to prevent mass redundancies.
The current requirements for employers are to pay for national insurance and pension contributions only.
As the scheme begins to wind down employers are being asked to pay higher contributions to their employees wages while they are furloughed. The government’s contribution reduced to 70 per cent, capped at to £2,187.50 per month in July, with employers required to pay 10 per cent of their staff’s wages to cover the 80 per cent.
In August, business owners will see that contribution rise to 20 per cent with the government paying 60 per cent of wages. The cap on monthly contributions has also fallen to £1,875.
According to the latest HM Revenue and Customs figures, 11.6m jobs have been supported through the scheme as of June 30 2021.
The number of jobs covered by furlough has changed over time as Covid-19 restrictions have reduced. The latest figures show 1.9 million employees were still being paid through the furlough scheme as of June 30, a drop of 500,000 since May 31. This is down 1.2 million on the 3.5 million people receiving furlough payments a month earlier on April 30. The numbers have been on a downward trajectory since January when 5.1 million jobs were being supported.
More than £67 billion has been spent on the furlough scheme as of June 30 2021.
However, the Conservative Government’s massive investment has drawn criticism from opposition parties. Labour have taken issue with ministers leaving furlough announcements to the “last possible minute”, warning that it has left “businesses in the dark” and led to redundancies that could have been prevented. Party leader Keir Starmer has called for flexible furlough payments to be made available on request to working parents to allow them to look after their children during Covid-19 lockdowns.
It is unclear if the Job Support Scheme is still planned for the future. It would see workers receive up to two-thirds of their usual pay only if they could work a fifth of their normal hours.
I was already made redundant. Can I be furloughed?
If you worked for a company from March 20 2020 up until and including September 23 but were made redundant then you can be rehired and placed on the Job Retention Scheme.
Guidance from the Treasury says workers who were employed on fixed term contracts and on the payroll on September 23 before being made redundant can be re-hired and placed on the Job Retention Scheme. However there is no obligation for businesses to do this so talk to your former employer and if an employer decides to rehire an employee to furlough them they must have the consent of that employee.
Is furlough going to be available outside England?
It will continue to be available in all of the UK. Leaders of the devolved nations were already calling for a furlough extension from the UK Government, to allow them to implement stricter lockdowns independently with the best shot of slowing the spread of Covid-19.
How was the Job Support Scheme going to be different from furlough?
The JSS was set to cover employees who worked at least 20 per cent of their hours (down from a third). The government would fund 61.67 per cent of all remaining unworked hours while the employer funds 5 per cent.
This means staff would be earning less than they would working full-time, with the amount lost dependent on how many hours an employer could offer – or pay – an employee. Businesses would still be expected to pay national insurance and pension contributions.
Staff could work just one day a week and qualify for the scheme — but this means the workers at companies hardest-hit by restrictions would be worse-off.
Those who worked a day a week would get 73.3 per cent of their usual pay, regardless of how little that was, compared to 78 per cent for people who could work a third of their hours.
Workers would generally be better off on furlough, but campaigners are calling for a minimum wage floor to be implemented that will ensure already low-paid employees have enough money to live on.
With the furlough scheme extended until the end of September 2021, it is unclear if the scheme will return once the Job Retention Scheme is wound down.
I’m still at risk of redundancy. What can I do?
Check if your potential redundancy is fair
Workers are protected from discrimination and from being selected for redundancy for an unfair reason like pregnancy, working part-time or having previously made a complaint about health and safety.
Using the usual selection criteria (e.g. measuring performance) may also be unfair if some of the workforce has been off work for the last few weeks or months for childcare, caring responsibilities, or shielding reasons, says charity Working Families.
Read up on how much redundancy pay you could be entitled to
Under law, there is a minimum statutory redundancy pay you should receive if you’ve been an employee for two years, and it depends on your age.
If you have worked for your company for less than two years or are self-employed, you’re not entitled to it. Bear in mind you could be denied statutory redundancy pay if you turn down a suitable alternative job from your employer without good reason.
If you are furloughed and likely to be made redundant soon, remember your redundancy pay should be based on your full wage, not what you were paid while on the furlough scheme (if you were paid 80 per cent of your wages while on furlough).
Check for what holiday pay you could be entitled to
Your employer can tell you to take any leftover holidays but must give you notice that’s at least twice as long as the leave they want you to take.
Check your notice period
If you’ve worked for your employer for between a month and two years, you’re entitled to a week’s notice. If you have been employed by them for more than two years, that goes up a week for each full year you have been there to a maximum of 12 weeks. Remember the notice period only starts when you’re formally told you will be made redundant and gives you a finishing date, not when told you’re at risk of redundancy.
You could be entitled to paid time off to look for work
If you’ve worked for your employer for two years at the end of your notice period, you’re likely to be able to claim “reasonable” time off to apply for jobs or go on training. You can take the time off at any time in normal working hours – up to 40 per cent of a week’s work – and your employer can’t ask you to rearrange your work hours to make up the time off.
Check if you get legal expenses cover through your home insurance
It could mean you get free legal help to challenge your redundancy if you think it’s unfair. And if you have a trade union at work, contact them for advice and potential representation. An employer must consult with a trade union or staff reps if more than 20 people are made redundant.
Remember being at risk of redundancy doesn’t necessarily mean you will lose your job
It could mean your employer redeploys you in another role. Consider contacting Citizens Advice if you need more support.
If you’re at risk of redundancy there are a few things you should do to check if your employer can make you redundant — no matter how long you’ve worked for your employer
⬇️ Our advice can help https://t.co/LTCmcq7Nn6
— CitizensAdvice (@CitizensAdvice) October 1, 2020
The Big Issue is fighting the unemployment crisis through the Ride Out Recession Alliance, bringing together the most innovative ideas and experts to help keep people in work and in their homes during the recession. Get in touch with what you think can be done to support those in need by emailing email@example.com.
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- Redundancy rights: Everything you need to know
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- Job interview questions: What to ask and how to answer
- CV templates: Free downloads for job application success
- What to do if you’ve been made redundant
- Apprenticeships: Everything you need to know
- Apprenticeships: How to get a job once your placement ends
- Redundancy: Surviving the mental health impact of losing your job
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- How to go self-employed in the pandemic
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