Starting on the 1st November 2020 and running for 6 months, the scheme will work as follows:
- Employees must work at least one third of their usual hours and those hours must be paid directly and solely by their employer.
- The employer then tops up the wages by another third of the employees usual hours work.
- The government will then pay another third of the employee’s wages, capped at £697.92 per month.
In effect, employees will receive 77% of their wages for working a third of their hours (where the Government cap has not been met), with the Government paying a maximum of 22% of someone’s wages. A steep drop from the 80% they were covering at the start of the furlough scheme.
The Government’s contribution will be paid in arrears to effectively reimburse the employer so the first claims can be made from December 2020 onwards.
The grant will not cover Class 1 employer NICs or pension contributions which will remain payable by the employer.
Employees cannot be made redundant or put on notice of redundancy while their employer is claiming under the scheme and their holiday will continue to accrue as normal.