For employees, there will be no change to the terms – they will continue to receive 80% of their salary, for hours not worked, subject to the monthly cap of £2,500 per month.
As before, employers will continue to pay employee pension and National Insurance contributions.
As businesses reopen, the government will ask employers to contribute alongside the taxpayer to the cost of paying their employees.
Nothing will change until July 2021, when employers will be expected to contribute to employees’ furlough pay alongside the government on a tapered basis.
During July, the Government will contribute 70% and employers will be required to contribute 10% of pay for hours not worked, subject to the monthly cap of £2,500.
During August and September, the Government will contribute 60% and employers will be required to contribute 20% of pay for hours not worked, subject to the monthly cap of £2,500.
We recommend that local VCSE organisations (where relevant) notify their staff that they are aware of this extension to the scheme, making clear that further information will be communicated to applicable staff in due course and, where appropriate, updated furlough letters will be provided.
In particular, employers will need to review the letters they have sent to furloughed staff in the past to see whether those letters refer to a specific end date for furlough, or state more generally that furlough will continue until the end of the scheme.
In addition the Chancellor announced in the budget that they reaffirm their commitment to end low pay, increasing the National Living Wage to £8.91 from April 2021.
Details of the 2021 budget speech can be accessed here.