Coronavirus Job Retention Scheme: Furlough Period Extended

Tuesday 12 May: In response to concerns of a cliff edge effect of the Coronavirus Job Retention Scheme ceasing at the end of June, the Chancellor has announced an extension of the scheme to the end of October 2020.

The existing scheme will now run until the end of July and a new scheme is to be introduced that will enable furloughed employees to begin to return to work on a part-time basis from August 1st

All furloughed employees, whether fully or partially furloughed, will continue to have their wages topped up to 80% of their normal salary (capped at £2,500) by the Government until the end of October.

The details of the new scheme have not yet been released – the Chancellor has committed to reveal them by the end of the May,

but it has been made clear that employers will be expected to contribute to their employees’ salary costs where the employees have partially returned to work, which is perfectly fair, of course.

This change to the mechanics of the scheme is welcome, particularly as the economy starts to emerge from its partial hibernation.  We do not want employers to be making artificial decisions on employee resources just to satisfy the extremely restrictive terms of the existing job retention scheme.

If it makes good business sense to bring an employee back on reduced hours, then it will be extremely helpful to be able to do that, free from concerns of losing all of the relevant government grant support.

This should enable a natural reopening of the economy at a sensible and viable pace.