Furloughed workers start to return as jobs scheme winds down

The introduction of the flexible furlough scheme from 1 July 2020 saw around 20% of furloughed workers brought back into the office in that first month, according to HMRC statistics.

But with the scheme due to end on 31 October 2020, to be replaced by the less generous Job Support Scheme, what impact will this have on the employment figures?

The flexible furlough scheme has been hailed as a key measure by the government to protect jobs from the lockdown resulting from Covid-19.

Under flexible furloughing, employees can work some of the time (on their full pay) and be furloughed for the rest (on 80% of their pay), in any proportion agreed between employer and employee. This has created the employment flexibility that was not present in stage one of the furlough scheme.

As firms have gradually picked up after leaving lockdown, they have had the flexibility to re-employ their staff in proportion to the work available.

Statistics reveal that 950,000 employees returned to offices, shops, restaurants, and factories on a part-time basis in July, which is roughly a fifth of all furloughed workers. More have since returned, leaving around 3 million still on partial or full furlough, according to Treasury figures.

Around 9.6 million jobs in total were protected by the furlough scheme, and it remains to be seen whether the combination of the Job Retention Bonus, the new Job Support Scheme, and the Plan for Jobs will be enough to save the majority of jobs.

1 October 2020 changes

From 1 October the flexible furlough scheme becomes less generous with employers having to pay 20% of a furloughed worker's wages, and the government paying 60% in order for employees to receive 80% in total. In addition, employers have to pay employers NIC and the workplace pension.

The support that the government has previously given of paying the full 80% as well as the NIC and pension has been gradually scaled back in advance of the scheme's conclusion.

1 November 2020 changes

From 1 November and until 30 April 2021, workers in "viable jobs" will have their wages topped up by the government for working as little as a third of their normal hours.

Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.

This means employees who can only go back to work part time will still be paid two thirds of the hours for those hours they can’t work.

In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

The Job Support Scheme will be open to businesses across the UK, even if they have not previously used the furlough scheme.

It is designed to sit alongside the previously announced Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs.

More details about the Job Support Scheme will be published before the end of October.