Furlough has been extended until the end of September.
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The furlough scheme will be extended until the end of September, Chancellor Rishi Sunak has confirmed in his Budget.
The scheme has helped pay the wages of millions of people who may otherwise have lost their jobs during the coronavirus pandemic.
Furlough will continue until 30 September to “support millions through the next stage of the pandemic”.
Furlough applies across the UK and covers up to 80% of an employee’s salary for the hours they can’t work, up to a maximum of £2,500 per month.
As Covid restrictions start to lift, employers will have to help cover the cost of their furloughed workers’ salaries.
They already have to pay pension and National Insurance contributions.
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The government in England has said all areas of the economy – including all shops, pubs and restaurants – will fully reopen by 21 June at the earliest. Other parts of the UK have their own plans for easing lockdown.
Furloughed employees will continue to receive up to 80% of their pay for hours not worked while the scheme continues:
- From July, the government will contribute 70% and employers will have to pay 10% for hours not worked
- In August and September the government will pay 60% and employers 20%
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The aim of the furlough scheme is to allow companies to continue employing workers, even when lockdown means there’s nothing for them to do.
It is also used to support parents who have to look after children while schools are shut, those with other caring responsibilities, or people who are clinically extremely vulnerable and cannot work safely.
The scheme was due to finish at the end of April, but the sectors that rely most on furlough would not be fully open by then.
More than a million food and accommodation workers were on furlough at the end of January, as were 938,000 in the retail sector.
Under the government’s lockdown roadmap for England, gyms, hairdressers and non-essential shops will reopen by 12 April at the earliest. Pubs and restaurants can serve customers outside if lockdown is eased at this time.
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But restrictions on household mixing will remain. Indoor hospitality venues such as hotels, cinemas and theatres won’t be able to open until at least the middle of May.
Furlough was introduced at the beginning of lockdown in March 2020, and has already been extended twice.
The last extension – in November – was announced at very short notice. Employers complained they had been forced to lay off workers they might otherwise have been able to keep.
Furlough has cost the Treasury almost £50bn so far.
However, the price of not extending it would probably be a further rise in unemployment, which has already reached a rate of 5.1%.
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According to the most recent figures (up to 31 January):
- 11.2 million jobs have been supported by the scheme since March 2020
- About 4.7 million people are currently on furlough
- The highest take-up rate has been in hospitality (food, drink and accommodation) industries – 1.2 million jobs furloughed as of 31 January
- Four out of 10 employers are using the furlough scheme
You can be furloughed whether you are on a full-time, part-time, agency, flexible or zero-hour contract, but you must have been on your employer’s payroll before the extension was announced.
It is not necessary to have been furloughed before and you keep all your working rights, including annual and parental leave.
While you are on furlough you can take on other jobs, as long as you doesn’t break the rules of your contract. You can also take part in training, or volunteer for an unconnected organisation.
Since last summer, employers have been able to bring back workers part-time, and furlough them for the rest. This will continue, and employers will have to pay employees’ wages for the hours they work as normal.
