Before the coronavirus pandemic began, ‘furlough’ was a word that most people hadn’t even heard of before. Now part of everyday life for many employers and staff, it is important to be aware of how to bring staff back to work and from the Coronavirus Job Retention Scheme.
The Institute for Fiscal Studies (IFS) reported that at the end of April, over 3.4 million jobs were still reliant on the CJRS, meaning that any amendments to the furlough scheme will have an effect on thousands of employees and employers around the country.
The furlough scheme began in March 2020 and had provided 80% of the salaries to employees (up to a maximum government contribution of £2,500 per month) – with employers only being responsible for paying employer National Insurance and pension contributions.
As of 1st July, this decreased to a 70% contribution, so the employer has to pay 10% of the salary themselves to make up the 80%.
In August and September, employers will have to pay 20%, with the government picking up 60%. This should not affect the amount the employee receives, furloughed employees will continue to receive 80% of their wages including the employer contribution.
This does then pose one major issue – that is, with the added costs to keep employees on the furlough scheme from the employer, will this add more pressure to retain jobs if the additional costs still cannot be covered?
For a furloughed employee previously earning £20,000 per year, the cost to an employer of keeping them will rise from £155 per month in June to £322 in July, and £489 per month in August and September, after which the scheme is due to end.
Getting back to work
As the majority of coronavirus restrictions have now been eased, this paves the way for employer to attempt to get back to some kind of normality.
Getting staff back to work should now be on the agenda for most employers, flexible furlough is a great way to do this.
Staff can be brought back into the business on a ‘phased return approach using flexi-furlough. This has the benefit of financial support for employers, but also a huge benefit of easing staff back into working life. Going straight back into full-time work may not be as easy for some as it is others, in-hand with the additional benefits to employers to sustain the business moving forward by utilising flexi-furlough in the way which it has been intended.
It is important for employers to recognise that many staff will need an adjustment period as we transition out of what has been the strangest period of time we have all gone through in our lifetime.
Employers should regularly review the furlough agreements they have in place to see if it’s suitable for employees to be put on flexible furlough or to return to work full time when the time is right.
As an employer, you should consider
- Which job roles and skill sets are most crucial to the business at each stage of reopening
- How many staff are needed and at what time – are they needed all at once? How can you create a staggered approach?
- Highlight any staff from the team that may not be able to begin work straight away – are they currently in isolation, are they now responsible to care for a family member they weren’t previously, have they been told by a doctor to stay at home?
If you wish to end furlough for an employee – you need to give notice in writing. Where there is no official notice period, employers should give staff notice in writing.
There’s no minimum notice period for furlough, but employers should:
- Arrange a meeting to discuss your plan to end an employees furlough
- Give your staff the opportunity to highlight any questions or issues they have around returning to work and going back into their role. Will refresher training need to be offered? Do they need additional support
Further details of changes to the CJRS can be found at GOV.UK CJRS.
ACAS has also put together a library of furlough letter templates to assist employers.