Dorset businesses are being urged to prepare thoroughly for the end of furlough in September or be faced with tough and potentially costly decisions.
Law firm Blanchards Bailey says that with less than 70 days to go before the Coronavirus Job Retention Scheme is due to be phased out, businesses should now have firm plans in place.
Furlough was introduced by the Government in spring 2020 to prevent workers from being laid off by employers during the pandemic lockdowns.
The Government paid 80% of the wages of people who couldn't work, or whose employers could no longer afford to pay them – up to a monthly limit of £2,500.
Blandford-based Blanchards Bailey says that although scheme has been extended four times since then, with the economy opening up and businesses able to reopen, it is unlikely there will be a further extension beyond 30 September.
From this month employers have had to contribute 10% towards wages and this rises to 20% from August.
Forecasters are predicting a small rise in unemployment after 30 September, especially within the international travel sector and other businesses which are still seriously disrupted. However, some within the hospitality industry believe it will be easier to recruit staff once furlough ends.
Blanchards Bailey’s head of HR and operations Jane Eldridge-Cordner says businesses which have been reliant on furlough must ensure they prepare for the end of the scheme and budget accordingly. She said: "We are urging employers to consider this matter with some urgency. Although we can never be certain about anything during this pandemic – and some businesses, particularly in hospitality are calling for a further extension – we believe the end is in sight.
"The Government has spent £66 billion on furlough and it has supported 11.6 million jobs since March 2020, but it can’t go on forever."
Stephen Woodman, solicitor litigation and disputes, added: "Latest figures from HMRC show more than a million workers came off furlough in May, and the Office for National Statistics estimates there are now between 1.3m and 1.9m people still relying on furlough cash.
"Bearing that in mind, and with the economy opening up, we though it apposite to remind businesses that 30 September is not that far away and offer some practical help to employers.
"We fear that if Dorset businesses do not prepare thoroughly for the end of furlough, they could be faced with agonising decisions which may well prove expensive and damaging."
Eldridge-Cordner and Woodman have put together a handy guide for employers.
Woodman added: "A level of uncertainty will continue to exist for months so the best thing any employer can do right now is prepare for any eventuality and take legal advice from our experts who are right across this subject."
About Blanchards Bailey
Ninety-strong Blanchards Bailey is a Legal 500 firm – making it one of the top firms in the South West – and is based in Blandford with offices in Poundbury, Shaftesbury and Weymouth.
The firm received extensive recognition in the UK's leading law sector directory, the Legal 500. The annual publication, The Legal 500 2020/21, mentions the firm in six categories with seven individual lawyers recommended.
Pictured: Jane Eldridge-Cordner and Stephen Woodman