Furlough set to shift towards employer contributions from August

Published:  23 May, 2020

 Garages with staff on furlough are set to find out in the next few days the details of the next phase of the job protection scheme, as Chancellor of the Exchequer Rishi Sunak looks set to ask employers to pay at least 20% towards wages from August.

He is expected to lay out the details in the week on how the Coronavirus Job Retention Scheme will change, according to The Times.

Since April, the government has been paying up to 80% of employee wages, up to a maximum of £2,500 a month, for around 7.5 million people. The furlough has been extended twice, and is currently set to end in October.

While companies will be required to contribute, they will also then be able to bring staff back in part-time as the lockdown winds down into the autumn. They will need to start paying for National Insurance Contributions again, although pensions contributions will still be covered by the government.

“We’ve got two full months of support left and afterwards the government will help to pay people’s wages,” a Treasury source told The Times, “but it’s fair to everyone that businesses contribute as they get back to work.”

A cut-off date is also expected to be imposed, after which no new employees will be able to be furloughed, a measure designed to prevent people playing the system.

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