Is Your Business Ready For The Upcoming Changes To The Government Job Retention Scheme?

Since the Government lockdown at the end of March 2020, HR Services Scotland Ltd have been working hard to redesign their working methods and practices in order to continue to fully support our client base.

With effect from Wednesday 1st July 2020, the Government initiated the flexible furlough scheme whereby employers could bring previously furloughed employees safely back into the working environment on a part-time/reduced hours basis, and retain them on furlough leave for the remainder of their contractual hours whilst still claiming 80% back from the Government Coronavirus Job Retention Scheme.

Whilst the flexible furlough scheme will be in place until 31st October 2020, after which the job retention scheme will completely cease, employers need to be mindful that from 1st August 2020, they will be required to make contributions to their employee’s wage as follows:

  • From 1st August 2020, businesses will be expected to contribute to employer NICs and pensions
  • From 1st September 2020, businesses will be expected to contribute 10% of the wage bill, with the Government contributing 70% to make up the 80%
  • From 1st October 2020, businesses will be expected to contribute 20% of the wage bill, with the Government contributing 60% to make up the 80%
  • The flexible furlough scheme ends on 31st October 2020

With all of this in mind, employers must consider their options now to plan for contributions beginning 1st August 2020 and what this means for them, both economically and commercially.

1st August 2020 is an important day for organisations in the UK.

For many organisations, 1st August 2020 will be the start of a very important period of post-coronavirus economic recovery. This is because the measures put into place by the Government, to help the country survive through the pandemic, will slowly unwind from 1st August.

As a result of this, organisations are reminded of the following:

  • Contributions to the Coronavirus Job Retention Scheme (furlough scheme) will soon begin
  • 31st July 2020 is the last date that organisations can make claims to the Job Retention Scheme for the period ending 30th June 2020
  • Shielding is coming to a pause until at least 31st July 2020
  • Organisations will have discretion over staff’s ability to work from home

The Furlough Scheme

Furloughing is when employees are placed on a temporary leave of absence where they do not carry out any work and receive no pay but are retained on an organisation’s books to be brought back when needed. Whilst furlough traditionally means that the affected employee will receive no pay, the Job Retention Scheme includes a grant from the Government to cover at least 80% of furloughed employees’ wages, to a maximum of £2,500 per employee per month.

Although the scheme does not end until 31st October 2020, as abovementioned, there are two developments on the furlough scheme occurring on 1st August 2020. The first is that organisations must begin to make employer’s National Insurance contributions and pension contributions to furloughed workers’ wage costs. The 80% grant paid by the Government will continue at a cap of £2,500 until the end of August. The next thing to note in relation to the furlough scheme is regarding claim periods. There is a one-off deadline of 31st July 2020 that organisations have to make a claim under the Job Retention Scheme for furloughed staff. This applies to the period up to and including 30th June 2020.

Shielding

Shielding was introduced for clinically vulnerable people as a measure to both protect said individuals and relieve pressure on the NHS at the peak of the pandemic. In the UK this will be paused from 1st August 2020, which means that employers will be able to return these staff to the workplace.

Homeworking

From 1st August 2020, organisations across the UK will be granted more discretion to end any homeworking measures implemented as a result of lockdown. The Government has affirmed that it is for organisations to decide how to run workplaces safely and ensure all appropriate health and safety measures are in place prior to staff returning to work. This discretion does, however, still include the powers to allow some staff to keep working from home for as long as they need to, for example, due to health conditions. Either way, employees should be consulted on plans and must not be forced to return to work if it is not safe to do so.

Redundancy Programmes

There is little doubt as a result of these unprecedented times caused by the Covid-19 pandemic that redundancies are on the rise. They are also beset with issues not experienced before, such as how should they be conducted during the lockdown or whilst staff remain on furlough or flexible furlough leave. We must stress from the outset that there is a proper due process that must always be followed and clearly and concisely documented. Make technical errors in this process and you could be hit with unfair dismissal claims. These can be expensive with up to 52 weeks’ gross pay being awarded. Talk to us if you need support managing the process. Key pitfalls to be wary of include not having the correct selection pools, not consulting early enough, not adhering to consultation timescales and finally, selection criteria which discriminates against anyone with a protected characteristic. These would be equally relevant during normal times, but what is different right now is how you deliver the news.


If we can help you with this or any other HR issue, please do not hesitate to contact a member of our HR Team at HR Services Scotland Ltd on 0800 652 2610 – select option 1 for HR