New Furlough Agreements

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New Furlough Agreements: What You Need to Know

In response to the ongoing global pandemic, many countries have implemented furlough schemes to support businesses and employees affected by COVID-19. Furlough agreements have allowed employers to place workers on temporary leave, with the government covering a percentage of their wages.

Recently, there have been updates to the furlough schemes in various countries, including the UK. In this article, we will discuss the new furlough agreements and what employers and employees need to know.

UK Furlough Scheme

On October 31, 2020, the UK government announced that the furlough scheme – officially known as the Coronavirus Job Retention Scheme (CJRS) – would be extended until December 2020. In November 2020, the Chancellor, Rishi Sunak, announced that the scheme would be extended until the end of April 2021.

Under the new furlough agreement, the government pays 80% of an employee`s wages, up to a maximum of £2,500 per month. Employers are only required to pay employer National Insurance Contributions (NICs) and pension contributions. Employers can also choose to top up their employees` wages if they wish to do so.

Employees can be furloughed full-time or part-time, and they can be furloughed for any length of time. However, employers are required to submit a claim for furloughed employees at least seven calendar days before the start of the period they are claiming for.

It`s worth noting that employees who were not on the payroll on 30 October 2020 cannot be furloughed under the CJRS. There are some exceptions to this rule, such as employees who were on the payroll on 23 September 2020 and were made redundant afterwards.

Other Countries

Other countries have also implemented furlough schemes to support businesses and employees during the pandemic. The details of these schemes vary, but they generally involve the government covering a percentage of an employee`s wages while they are on temporary leave.

For example, in Canada, the federal government announced the Canada Emergency Wage Subsidy (CEWS) in March 2020. This scheme covers up to 75% of an employee`s wages, up to a maximum of $874 per week, for eligible employers.

In Australia, the government introduced the JobKeeper Payment in March 2020. This scheme provides eligible employers with a fortnightly payment of $1,500 per eligible employee. The scheme has since been extended until March 2021.

Conclusion

Furlough agreements have become an essential tool in supporting businesses and employees affected by COVID-19. With new updates to the furlough schemes in various countries, it`s important for employers and employees to stay up-to-date with the latest information.

If you`re a business owner or employee, it`s worth checking the details of your country`s furlough scheme to see if you`re eligible. Understanding the new furlough agreements can help you make informed decisions about your employment and finances during these challenging times.