The Government's furlough scheme, designed to prop up businesses during the coronavirus pandemic, closed to new applications earlier this month.
Employers will need to start making compulsory contributions to the scheme from August and the arrangement will formally end in October.
The scheme is expected to cost around £60 billion by the time it closes later in the year, according to the Office for Budget Responsibility.
Originally announced on March 23, the job retention plan pays 80 per cent of employees’ wages up to £2,500 a month to save them being laid off during the coronavirus crisis.
To date, 9.2 million jobs have been covered by the scheme, with 1.1 million businesses claiming a total of £22.9 billion up to June 21.
Here, we take a closer look at employees' rights and how the scheme will come to an end.
What is furlough?
If a company is unable to operate or they have no work for staff to do during the pandemic, workers can be put "on furlough", which means they are kept on the payroll and not made redundant.
Employers facing difficulties are able to access support through the Coronavirus Job Retention Scheme to continue paying 80 per cent of staff wages, to avoid redundancies and keep paying staff.
Under the Government scheme, workers will be paid 80 per cent of their wages, up to £2,500 a month, and continue to pay tax on their income.
Employers can agree to pay the extra 20 per cent, but do not have to.
Data from the Office for National Statistics (ONS) shows that less than half of businesses using the furlough scheme are topping up their workers’ pay.
It is important to note that both you and your employer must agree to put you on furlough and your employer must confirm in writing that you have been furloughed to be eligible to claim.
When will the government's furlough scheme end?
The scheme will continue until the end of October.
But employers will need to start making compulsory contributions to the scheme from August to cover National Insurance and pensions contributions.
In September, bosses will also have to pay 10 per cent of a furloughed employee’s wages, with the Government covering 70 per cent up to £2,190 per worker.
This will rise to 20 per cent in October, with the Treasury picking up the remaining 60 per cent, up to £1,875.
The Government said this represents 14 per cent of the gross employment costs for September and 23 per cent in October.
Future claims from businesses for furlough money from July can only be made by employers using the scheme already.
Updating MPs on the Government's plans to extend the scheme on May 12, Chancellor Rishi Sunak said: "I’m extending the scheme because I won’t give up on the people who rely on it.
"Our message today is simple: we stood behind Britain’s workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side."
Around 5 per cent of the workforce returned from furlough at the end of May, with construction and manufacturing sectors reporting the largest proportions at 14 per cent and 10 per cent respectively.
Is there any chance furlough will be extended beyond October?
It seems highly unlikely.
Mr Sunak told the Commons earlier this month: “We will keep everything under review, but my expectation is by then (November) the scheme should end.
"We’ve stretched and strained to be as generous as possible to businesses and workers, which is why we have made the decision that we’ve made today.”
