Furlough changes: Agencies and suppliers must pay some wages

The Chancellor has revealed how he will wean businesses off the Coronavirus Job Retention Scheme - meaning that agencies and suppliers will have to start paying parts of the salaries of their furloughed staff in just over two months time.

Rishi Sunak says agencies and other employers will be able to take back furloughed staff part time for as many hours a week as they wish; and from the start of August it is likely that employers of furloughed staff must pay a quarter of their wages, even if they are still in lockdown and not open at that time.

Companies will also be required to restart the payment of national insurance, although it is thought the government will continue to pay pension contributions.

More than eight million adults have been furloughed in Britain through the scheme with many agencies and industry suppliers known to have taken advantage of the initiative, which guaranteed staff pay representing 80 per cent of salary up to £2,500 per month; the government also currently covers national insurance and pension payments.

Earlier this month Sunak announced an extension of the scheme until the end of October, although with the caveat that employers will have to start contributing.

The Treasury has indicated that employers will be obliged to declare the number of hours some currently-furloughed staff work if they return part-time; firms abusing the system by failing to pay their share of staff wages risk being charged with fraud and potential breach of contract with their employees.