The furlough scheme, also known as the Coronavirus Job Retention Scheme, has provided a lifeline for many employers and employees since it was introduced in March 2020.
The word ‘furlough’ means a temporary leave of absence from work. Until the Coronavirus pandemic, ‘furlough’ meant very little to employers and employees alike. Since the scheme was introduced into our society, it has seen many alterations, including the introduction of `flexible furlough.’
As life starts to return back to `normal’ and businesses bring their staff back, furlough will not be needed anymore, the end of September 2021 will mark the end of the scheme. The government contribution will remain at 80% until June 2021. Then the government contribution will be reduced as follows: from July, the government will contribute 70% and employers will have to pay 10% for hours not worked plus NICs and pension contributions. In August and September, the government will pay 60% and employers 20% plus NICs and pension contributions.
The retail and hospitality industries have seen the highest total in claims throughout the pandemic, the scheme was designed to keep people connected to jobs that would return after the pandemic peak passed. With the reopening of many industries, furlough claims should see a decline over the coming weeks and months.
According to finance analysts, the age groups most affected have been 18-24 years olds and over 65s. Despite the success of the scheme for many people, many others have been and will continue to be made redundant. Some companies have had to cut staff numbers in order to adapt to the new business condition. Despite this, the UK economy is showing signs of a strong recovery and job adverts have finally risen above pre-pandemic levels.
If you want to discuss bringing your employees back from furlough, get in touch.