Until at least 31 January 2021, the government will pay 80% of employees’ normal pay for hours not worked, up to a cap of £2,500 (reduced in proportion to the hours not worked), while employers will pay employer National Insurance Contributions (NICs) and pension contributions.
Flexible furlough is allowed, and for employees on flexible furlough, employers should continue to pay them for hours worked, and deduct and pay the tax and NICs due on those amounts, in the normal way.
Employers can claim the grant for the hours that their employees are not working, calculated by reference to their usual hours worked in a claim period.
The amount of the government’s grant per furloughed employee may change after 31 January 2021, depending on the outcome of the government’s review in January.
For the time being, the previously announced Job Support Scheme and Job Retention Bonus will not go ahead as planned, but a retention incentive will be deployed at the appropriate time.
For further details, see our Q&A on the UK’s extended furlough scheme
For more information on these articles or any other issues involving labour and employment matters in the United Kingdom, please contact Robert Hill (Partner) at Clyde & Co at email@example.com or visit www.clydeco.com.