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UK Government announces Furlough Scheme update

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The UK Government has unveiled plans for employers to start paying towards their furloughed employees, under what is officially known as the Coronavirus Job Retention Scheme.

The scheme aims at mitigating the economic effects of the coronavirus pandemic and has been extended until the end of October.

The following will apply for the period employees are furloughed:

  • June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

Employers wanting to place new employees on the scheme will need to do so by June 10th, to allow time to complete the minimum furlough period before then.

For more information about the furlough scheme and how to apply please read the full press release.

We can assist you in any employment matters including issues relating to the Coronavirus Job Retention Scheme. Please contact Karl Thomas, Partner and Head of Employment and Dispute Resolution at Loosemores Solicitors via ThomasK@loosemores.co.uk or call 029 2080 3112.

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