New furlough rules from August 1 – and your pay will change

There are set to be significant changes to the way furloughed employees are paid coming into force across the UK on August 1.

Employers will have to start making salary contributions for all furloughed employees from Saturday, including national insurance and pension contributions.

However, though the UK Government will continue to foot the 80% bill for employee salaries.

This means that while your pay won’t change, the organisation paying it will – with businesses asked to cough up around 5% per person.

It follows on from new part-time working this month, which allows staff to return to shops and offices on a shorter shift pattern while still benefiting from the scheme, the Mirror reports.

Wage caps are proportional to the hours an employee is furloughed.

That means that if an employee is placed on furlough for 60% of their usual hours, they are entitled to 60% of the £2,500 cap.

The furlough scheme, which has seen the government pay the wages of millions of workers throughout the coronavirus pandemic, will come to an end on October 31.

In September, the scheme will change again, with the Government’s contributions falling to 70%.

All firms will have to pay the remaining 10% to make it 80%.

This will then fall again in October, when the Treasury’s contributions will fall to 60% and employers will have to pay 20%.

The changes have prompted fears that thousands of jobs could be slashed in the coming months, however the Chancellor has now launched a new bonus scheme that will pay employers to keep you on.

Back to work bonus

The UK Government has also introduced a back-to-work bonus, which will see employers paid £1,000 for every member of staff they bring back from furlough.

But there won’t be a cash bonus for the people on furlough themselves.

Called the “jobs retention bonus”, it was announced by Chancellor Rishi Sunak during his coronavirus mini-budget earlier this month.

To qualify, employees must be paid at least £520 a month on average in each month from November to January – the equivalent of the lower earnings limit in National Insurance.

Changes from August

From August 1, the Government will pay 80% of wages up to a cap of £2,500, however firms will need to make certain contributions.

Employers will have to foot the bill for national insurance and pension payments – equivalent to around 5% per employee.

Changes from September

From September 1, the Government will pay 70% of wages up to a cap of £2,190.

Employers will need to pay national insurance, pension contributions and 10% of wages to take the total to 80% (up to a cap of £2,500).

Changes from October

From October, the Government will pay 60% of wages up to a cap of £1,875.

Employers will need to pay national insurance contributions, pension contributions and 20% of wages to take the total to 80% (or £2,500).


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