Furlough scheme changes on July 1 but dealers shouldn’t rush back employees

Dealers shouldn’t rush bringing back employees off furlough next month when the job retention scheme changes and becomes more complex.

That’s the view of ASE Global’s chairman Mike Jones, who told Car Dealer Magazine dealers should be aiming to be as flexible as possible to react to consumer demand.

‘Where possible dealers need to not rush people back off furlough,’ Jones said. ‘As soon as we get into July people can be brought back flexibly and part time, with the government supporting the time not working.

‘This gives the retailer the ability to flex in line with consumer demand during Q3 while maximising the government support they receive.

‘I’ve been working with dealers to have a core team working overtime for the next three weeks to meet all customer leads and then look to increase the size of the team from July 1.’

Jones’s advice comes as the government has updated guidance on how the furlough scheme will change from July.

Employees will be able to return to work on a part-time basis and still receive a payment from scheme.

Nona Bowkis from motor trade legal specialists Lawgistics, said dealers need to be aware of this.

‘The three-week minimum is no more and overall the scheme is more complex, so it is vital dealers take time to understand the detail.’

How is the furlough scheme changing?

Guidance has been published on the government’s website detailing how the scheme will change from July to October and what employers need to be aware of.

You can read our in-depth guide on how the furlough scheme works here, but, in summary:

• There are no changes to grant levels in June.
• From July 1, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.
• For June and July, the government will pay 80 per cent of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
• For August, the government will pay 80 per cent of wages up to a cap of £2,500 for the hours an employee is on furlough and employers WILL pay ER NICs and pension contributions for the hours the employee is on furlough.
• For September, the government will pay 70 per cent of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80 per cent of their wages up to a cap of £2,500, for time they are furloughed.
• For October, the government will pay 60 per cent of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80 per cent of their wages up to a cap of £2,500, for time they are furloughed.

Employers will continue to able to choose to top up employee wages above the 80 per cent total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.

This week it was revealed 6.5m jobs had been furloughed by May 31, with some 1.1m businesses taking advantage of the job retention scheme.

Since the furlough scheme was introduced in March by the chancellor, Rishi Sunak, the government has paid 80 per cent of an employee’s salary up to £2,500.

On Car Dealer Live, we put dealers’ questions about the furlough scheme to Lawgistics this week. Among the questions we discussed:

Are the rules about staff on part-time furlough more relaxed?

What can you do if an employee is refusing to come back to work?

Can I choose employees to opt in and out of the scheme as work dictates? 

You can watch the full video below

 

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