The Chancellor announced yesterday that furlough pay is to remain at 80% of pay and the scheme extended by another four months to October 2020.
That said, from July, the government will be looking for employers to contribute to this both financially and by getting people back to work.
We believe getting employers to contribute is not a bad thing provided an employer can at least get some form of works going and/or borrow money to fund it. Why should the government borrow all the money to pay staff wages across the UK? Why should employers not also borrow some of the money and take on some of the burden? That said, it is all easier than done given that banks may not be able to lend money given that they too may have little reserves.
The Chancellor said that full details will be available ready for July and we suggest it is likely to that government will extend new borrowing facilities to employers to pay for some of the furlough pay. In short, furlough pay will still be funded at 80% by government but part of it will be treated as a loan to the employer.
What do this?
We suggest it is the government’s aim to encourage more employers to get their workplaces safe and fit for employees to return to work sooner rather than later. Employers really need to act quickly to buy protective equipment, clothing, gloves, masks, screens before they sell out. Believe us, they will.
Likewise makes plans for social distancing at work, professional cleaning, spacing desks and work stations, separate washing and eating facilities etc. If you do not keep your employees safe you could end up being sued.
It may even be that you have to stagger work, create shift patterns and at least get employees back to work on a part time basis. The government would still then pay say half of furlough pay rate if your employee was back working 50% of the time.
Do it now, don’t wait until it is too late.