The furlough scheme has been extended until September 2021
The budget has been announced, which has confirmed a further extension to the furlough scheme.
The scheme, which covers 80% of wages up to the £2500 monthly limit, was due to end on 30th April. It has been announced that it will be continued until the end of September. It will still be possible to use flexible furlough under the scheme, whereby staff can work some hours and be furloughed for the remainder.
For May and June, there will be no additional costs for employers (aside from the NI and pension, and accrued annual leave), however in July they will be required to contribute 10% of the unworked hours, and for August and September this will be 20% of the unworked hours.
What does this mean for businesses?
It is hoped that this extension will provide a safety net whilst sales and business picks up, and things start to reopen. However, there will inevitably be businesses who will need to make changes to their staffing after this period, as the costs may not be sustainable.
What changes can you make?
There are numerous options available, which include:
- Redundancies – this means reducing your staff numbers and/or headcount – possibly because work has diminished, sales are down, or you do not need as many staff in post
- Restructures – you might want to restructure your workforce to cover other elements or offer more flexibility
- Changes to terms and conditions – perhaps you don’t want to lose any roles, but to change any aspect of T&C’s (i.e., working hours, overtime payments etc)
- Flexible contracts – this might include having staff on casual or different types of contracts which can increase or decrease with demand
These are just an example of the options available, and there may be other solutions which suit your needs whilst your business recovers.
When should you make changes?
The most important thing you can do is to plan ahead. You now have time to plan and decide what the future workforce will look like, and allow yourself time for proper consultation with your staff ready to implement any changes.
It is really important not to leave this until the last minute – not only will this make the process more complicated, it could also result in you breaching the law and not being compliant.
Remember – all of these processes are likely to require consultation and be protected by statutory guidelines. Breaching these can be incredibly costly for your business.
Over the coming weeks we will be covering some of these areas in more detail. If you have any questions or need any support with any aspect of HR, please contact us or check out our HR services.