Bringing some positive news, surely needed before this Christmas, Chancellor Rishi Sunak announced that the current furlough scheme will continue unchanged until the end of April 2021.
The government initially intended to review the level of support in January 2021 but decided to bring the review forward.
Until the end of April 2021, the government will continue to pay 80% of wages (subject to the current cap and meeting the eligibility criteria) for employees on furlough. The employer will continue to pay the pension and NI contributions.
Of course, if the employee is doing some agreed work while on furlough, which is allowed under the current rules, then the employer will pay the usual wage and contributions.
Dealers may continue to utilize our most recent template for a furlough agreement and bearing the announced extension in mind, the furlough agreement can run to 30 April 2021.
Finally, the furlough guidance has been updated with reference to the Christmas seasonal holidays:
“…employees should only be placed on furlough because your operations have been affected by coronavirus (COVID-19) and not just because they are on paid leave. This applies equally during any peak periods in late December and early January.”
Previous specific guidance that employees should not be put on furlough “if you usually do less business over the festive period” has been removed. Nevertheless, the general principle that operation of the business must be affected by the coronavirus remains in force.
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