Furlough rules will change next week – everything you need to know

Furlough rules have been tweaked by Rishi Sunak in recent weeks. Coronavirus is still having a dramatic impact on the economy and as such, the government has been forced to adapt.

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In mid-May, the Chancellor of the Exchequer confirmed that the furlough scheme would be extended into October.

On top of this, it was announced that employers would need to contribute to the costs from August but the underlying workers themselves would see no reduction in support.

There was another change made which will be coming into effect from next week.

In order to get the economy moving, Rishi detailed that he will allow employees and their employers to use the furlough scheme while letting staff get back to work in flexible arrangements.

Rishi said at the time: “Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way.

“This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.”

This flexibility will be able to be utilised from July 1, next Wednesday.

On June 12, the government provided additional guidance on how the new flexible working arrangements would work in practice.

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From July 1, employees placed on furlough will be able to carry out work for any amount of time and under any work schedule.

This is known as flexible furlough and employers will have to pay the employees for the hours they worked but will still be able to claim from the scheme for the hours not worked.

However, from July onwards employers will only be able to furlough employees that they furloughed from March to June.

It should also be noted that employers are under no obligation to offer flexible furlough to their employees.

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The extension of the scheme and the changes made to working patterns was criticised by some.

As the economy continues to drag on, many voiced their fears that employers would not be able to afford the changes, especially if they’re expected to contribute to the scheme from August.

Despite the worries, many also welcomed the extension, noting how essential the support measures had been thus far.

According to figures released at the time of the announcement, businesses in the UK have benefitted from over £14billion in loans and guarantees to support their cash flow during the crisis.

On top of this, nearly eight million employees had seen their income protected.

In reaction to the extension news, Mike Cherry, the National Chairman of the Federation of Small Businesses, said “The Job Retention Scheme is a lifeline which has been hugely beneficial in helping small employers keep their staff in work, and its extension is welcome.

“Small employers have told us that part-time furloughing will help them recover from this crisis and it is welcome that new flexibility is announced today.”

Similar sentiment was shared by Adam Marshall, the Director General for the BCC: “The extension of the Job Retention Scheme will come as a huge help and a huge relief for businesses across the UK.

“The Chancellor is once again listening to what we’ve been saying, and the changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme.

“We will engage with the Treasury and HMRC on the detail to ensure that this gives companies the flexibility they need to reopen safely.”

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