Furlough changes: 6 things you need to know including your rights if you’re coming off it
FROM Thursday, there will be some big changes to the way Brits get their furlough pay – and it will affect all workers on the scheme.
The furlough scheme pays workers 80% of their wages for hours not worked, which is capped at £2,500 a month.
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So far, the government has footed the bill, but from July 1, bosses must start to chip in towards the cost of furlough payments for staff.
We explain what the changes are, and what you need to know about them – including what your rights are if you’re coming off the scheme.
What are the changes to the furlough scheme?
From July 1, companies will have to contribute 10% towards the pay packets of staff on furlough.
But the government is keeping the 80% rule, which means the government will top up the remaining 70% up to a maximum of £2,187.50 for hours not worked.
This will last until August, when employers will be expected to shell out 20% towards furloughed workers’ salaries – with the government paying 60% towards this cost.
Employers must still pay national insurance and pension contributions and are able to top-up the salary to 100% with their own money but don’t have to.
After September, it is expected that the economy will be fully open – so this is when furlough is earmarked to end.
According to the latest Government figures, the number of employees on furlough stood at 3.4million at the end of April.
What will happen to my pay?
While changes are being made to who is paying for furlough, your pay packet shouldn’t take a hit.
Can I be made redundant if I'm on furlough?
EVEN though furlough is designed to keep workers employed, unfortunately it doesn't protect you from being made redundant.
But it doesn’t affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.
Your employer should still carry out a fair redundancy process.
You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.
How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:
- Half a week’s pay for each full year you were under 22,
- One week’s pay for each full year you were 22 or older, but under 41,
- One and half week’s pay for each full year you were 41 or older.
Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.
There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.
You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.
If you’re made redundant after your company has gone into administration you can claim redundancy pay via Gov.uk.
The government is keeping the rule that workers will be paid for 80% of their wages capped at £2,500 – which means you shouldn’t see your money go down.
However, the upcoming furlough shake-up this Thursday has sparked fresh concerns for workers’ jobs.
There are fears the scheme changes could prompt redundancies because employers can’t afford to take on the increase of costs.
Experts have warned that cash-strapped hospitality businesses in particular might not be able to cover the costs of paying for furlough – and could let thousands of staff go.
This is because lockdown lifting has been delayed beyond the date furlough support starts to be reduced.
So while the changes to the furlough scheme shouldn’t see your pay docked, it could mean that you are at greater risk of being made redundant.
What are my redundancy rights if I’m let go on furlough?
Even though furlough is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.
Your employer should still carry out a fair redundancy process.
You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.
There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.
You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.
Will my redundancy pay be affected?
If you’re on furlough and you’re made redundant, your payout will be the same as if you are let go from your job under normal working conditions.
This means that if your weekly pay is £300 a week but you’ve been getting 80% of this due to being on furlough, your redundancy pay will still be £300.
How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:
- Half a week’s pay for each full year you were under 22,
- One week’s pay for each full year you were 22 or older, but under 41,
- One and half week’s pay for each full year you were 41 or older.
Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.
What will happen to my holiday allowance when I come off furlough?
Workers who have been placed on furlough continue to accrue their statutory holiday entitlements, and any additional holiday provided under their normal employment contract.
That means your holiday entitlement remains unchanged if you have been furloughed.
When you come off furlough, your holiday entitlement should remain the same.
If you don’t want to take any holiday off while you’re on furlough and you’ve got a backlog of holiday days building up, then you might be able to carry your allowance over to next year.
But this is down to your employer, so you should ask your HR department for more information.
What will happen to my holiday pay?
You can take off holiday when you’re on furlough – and you should receive the same amount of holiday pay based on what you would get if you were earning normally.
When you come off furlough and return back to work, the amount you get paid when you’re on holiday should stay exactly the same.
For more information on how much your holiday pay is, you should get in touch with your HR department.
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But some pub and and restaurant bosses are demanding Chancellor Rishi Sunak ends furlough to combat a spiralling recruitment crisis.
The furlough scheme has been extended a number of times as the pandemic continues, with the last changes announced in the Budget in March this year.
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