More than half of furloughed employees are now working again

Over half of employees that have been furloughed are now working again.

This is according to think tank, Resolution Foundation which found that of the 9.5 million workers furloughed, as of the beginning of August has reduced to 4.5 or 3 million.

From 01/08/20 employers had to start paying towards the Coronovarius Job Retention Scheme (CJRS), such as National Insurance Contributions (NICs) and pension contributions. Also from September companies must pay 10 per cent and then 20 per cent in October of the 80 per cent of wages the furlough scheme entitles to employees.

The average cost of an employee’s NICs and pension contributions tend to be £70 a month, which is equivalent to 5 per cent of an employee’s wage.

These workers who have returned to work have either done so full or part-time. Employees were allowed to work part-time whilst on furlough from 1st July. Employers have to pay the full amount of salary for the time worked where the CJRS will cover 80 per cent of the remaining days that did not see the employee at work.

The Foundation does praise the “success of the scheme” but states that millions still face the possibility of redundancies once the scheme ends. To circumvent this the think tank believes the scheme should phase in employer contributions at a slower and more gradual rate. It also calls on HM Revenue & Customs (HMRC) “to end the widespread confusion around take-up of the CJRS by publishing data on currently furloughed workers.”

The National Institute of Economic and Social Research (NIESR), an independent economic research institute predicted that closing the furlough scheme at the start of November could result in unemployment reaching 10 per cent this year.

Dan Tomlinson, the senior economist at the Resolution Foundation, said:

The Job Retention Scheme has supported around a third of the private sector workforce at some point since lockdown began, protecting family incomes and preventing catastrophic levels of unemployment.

But with the number of furloughed workers having peaked in late April, it is misleading to say that nine million workers are currently furloughed. Over half of these workers have now returned to work as lockdown restrictions have eased. The true figure is below 4.5 million.

But while furloughing is currently far less widespread than commonly claimed, there are still millions of employees without work, particularly in the hospitality and leisure sectors. These workers face a heightened risk of unemployment as the JRS starts to be phased out from today. The Chancellor should reduce this risk by phasing out support for these hardest hit sectors more slowly.

On 03/07/20 XpertHR research found that 46 per cent of employers expect staff on furlough to start working again by August, as well as 19 per cent believe workers will return part-time at the end of the summer. These two figures add up to 65 per cent.

In order to gather these results the Resolution Foundation, conducted an analysis of three separate Office for National Statistics (ONS) surveys, which also stated that the peak of the uptake of the scheme was in April with 8 million workers being furloughed.