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Legal Updates

Furlough and COVID-19 Employer Obligations Update

28 July 2020 #Employment #Podcasts and Webinars

A new report by the federation of small businesses found that almost 25% of companies have already reduced their staff numbers in the last quarter, this is a record high since the survey was first conducted. These results come despite the government support through the furlough scheme and other business interruption counter-measures. A similar survey conducted by insolvency firm Begbies Traynor has found that the number of small to medium sized businesses in financial distress has risen by 16,000 since the start of lockdown procedures in March. Many of the businesses surveyed believe that their performance will either remain stable or in fact worsen over the next quarter. Both surveys coincide with anticipated announcements from larger companies, such as Marks and Spencer, John Lewis and Dyson, who are also expected to make redundancies.

As of the 1st August, the furlough scheme changes once again. The government will continue to pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough however, employers will now have to pay any National insurance or pension contributions for the hours the employee is on furlough. Employers will continue to be able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Where employers are taking advantage of the “flexible furlough scheme”, they will have to pay their employees for any hours actually worked.

Our podcast on this update can be found here Update Employer Obligations Update


Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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Jacob Montague

Jacob Montague
Trainee Solicitor

T: 0118 960 4613
M: 0790 9964 585


Employment team
+44 (0)118 958 5321