Furlough rules change NEXT WEEK – how it will affect your pay


CHANGES to the rules around furlough mean that your employer will have to fund more of your wages – but what does it mean for your pay?

Companies will have to foot more of the bill for anyone furloughed under the Coronavirus Job Retention Scheme from August 1.

The rules around the furlough scheme are changing, meaning employers may need to foot more of the bill

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The rules around the furlough scheme are changing, meaning employers may need to foot more of the billCredit: Getty

The government extended the scheme until September 30, 2021, but revealed that employers would have to shoulder an increasing share of the financial burden.

The good news is that the amount you take home each month shouldn’t change, although it could if your company was voluntarily paying you extra.

Under the original scheme, the government paid 80% of wages up to a maximum of £2,500 per month.

But from July 1, the rules changed so that the government is only paying 70% of wages up to a maximum of £2,187.50 – employers now have to make up the difference so everyone still gets 80% pay.

From August 1, the government contribution will reduce again and the amount companies put in will rise.

The government will only pay 60% of furloughed workers’ wages up to a maximum cap of £1,875.

Again, your company will have to pay the remaining 20% so that you still get 80% of your wage in total.

One thing to note is that you could miss out if your company was voluntarily paying extra.

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Some firms chose to top up the government payments so that employees received 100% of salary while furloughed.

Now businesses have to foot more of the bill themselves, they may not be able to afford the extra payments.

There is also a risk that some companies will be more likely to go under, which could increase the likelihood of insolvencies and redundancies.

But generally, the extended scheme means that firms struggling due to the effects of the pandemic can continue to furlough you and recoup some of the costs from the government.

Who can be furloughed?

Your employer can only furlough you if you were working for them and paid on or before March 2, 2021.

You can be fully furloughed, where you don’t go into work at all, or flexibly furloughed where you still work some hours, days or weeks.

Any kind of employees can be put on the scheme including contractors and part-timers.

You can’t choose to furlough yourself. You can ask your employer if you want to be put on furlough – for instance if you’re clinically extremely vulnerable – but they don’t have to say yes.

Can I be made redundant if I’m on furlough?

EVEN though furlough is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.

But it doesn’t affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.

Your employer should still carry out a fair redundancy process.

You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.

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How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:

  • Half a week’s pay for each full year you were under 22,
  • One week’s pay for each full year you were 22 or older, but under 41,
  • One and half week’s pay for each full year you were 41 or older.

Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.

There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.

You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.

If you’re made redundant after your company has gone into administration you can claim redundancy pay via Gov.uk.

How do I claim furlough pay?

Your employer needs to claim your furlough pay through HMRC.

They will provide details of your salary so that the taxman can calculate what the business is owed.

Your pay should come through in your wage packet as normal, and you shouldn’t have to do anything.

It’s worth double checking to make sure your pay is right, particularly if you are on flexible furlough and working some hours as normal.

During your furloughed hours, your boss can’t ask you to do any paid work.

When will furlough end?

Furlough was initially due to end on October 31 2020 but the Chancellor extended it until December 2 after England was placed in a four-week national lockdown.

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Later, on November 5, he then changed his mind again and said it would run until the end of March 2021.

It was then extended again in mid-December by a month to the end of April 2021, before an extension to September was announced in the March 2021 Budget.

There are no more changes planned to how the scheme is funded after August 1.

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