Rishi Sunak introduces flexible furlough with 10% employer contributions from September

31May 2020

From Caterer Magazine 29.05.20

Rishi Sunak introduces flexible furlough with 10% employer contributions from September
Chancellor Rishi Sunak has announced that employers will be asked to pay 10% of furloughed workers’ wages from September, rising to 20% in October.

He also said that from July flexible furlough would be in place, allowing employers to bring back staff part-time.

At the moment the government is paying 80% of employees’ salaries, up to £2,500 a month. There are currently more than eight million people on the Job Retention Scheme.

It has already been announced that the scheme has been extended to October, but from August employers will need to pay furloughed employees’ National Insurance and pension contributions. In September they will need to contribute 10% towards wages, rising to 20% in October, before the scheme closes.

Sunak said: “As we reopen the economy there is broad consensus across the political and economic spectrum the furlough scheme can not continue indefinitely.

“Two weeks ago I underlined the principles of my approach. The furlough scheme will remain open until October and we will ask employers to start contributing as we introduce flexible furloughing and employees will see no change to their level of support.”

Commenting on this evening’s announcement of changes to the Coronavirus Job Retention Scheme, UKHospitality chief executive Kate Nicholls said: “This is a positive and pragmatic step towards reopening the economy while recognising that this recovery will take time, particularly in hospitality.

“Giving businesses increased flexibility from the start of July is extremely welcome as hospitality looks to reopen its doors to the public. The move, which UKHospitality had been calling for, will allow more people back to work on a part-time basis and help venues ensure safety for customers and staff. Flexibility is going to be crucial if businesses are to open and be economically viable with social distancing measures in place.

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