Since it was announced in March, one million businesses have used the government’s Job Retention Scheme to furlough 7.5m workers.
In a rebuke to Ministers who warned that businesses were becoming addicted to furlough payments, Chancellor Rishi Sunak has announced that the government will extend the Job Retention Scheme until the end of October. Under the extension workers will continue to receive 80% of their wages (funded by the government) while they are furloughed.
In the coming months, the government is planning on gradually re-opening the economy. As a result, the Job Retention Scheme will be modified to allow workers to return part-time.
From the start of August, furloughed workers will be able to return to work part-time. However, employers will be asked to pay a proportion of the salaries of furloughed staff. Payments made by employers will be deducted from the government’s subsidy. Under this new arrangement, staff will continue to receive 80% of their salary, up to £2,500 a month.