Flexible Furlough Scheme
Published on 15/07/2020
The next phase of the Coronavirus Job Retention Scheme
This change is largely welcomed by employers, but the downside is the horribly complex calculations attached to the flexible scheme, which may put some employers off utilising it.
We will attempt to set out the salient points of the new scheme, with links to the relevant guidance.
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Restrictions on furloughing an employee from 1st July 2020
The furlough scheme closes to new entrants from 1st July 2020 (with the exception of parents returning from statutory family leave), so if an employee hasn’t already been furloughed, it is now too late to claim for them under the scheme. In addition, the number of employees you can claim for in any claim period starting from 1 July 2020, cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June 2020. Finally, claims must be for a minimum period of one week and can no longer overlap different months. -
What working patterns can be used from 1st July 2020?
From 1st July , employers may agree with previously furloughed employees that they will return to work on any shift pattern and for any amount of time. There will no longer be a three week minimum period for furlough and their working pattern can change from week to week. To be eligible for the grant, employers must agree any new flexible furloughing arrangement with their employee in writing. Of course, flexible furloughing is an option, not compulsory, so if you have no work for your employees, you can keep them fully furloughed. Alternatively, you may wish to put in place a rotational shift pattern (now not restricted to minimum three week periods), which could help to avoid some of the more complex calculations set out below. -
How is an employee paid whilst on flexible furlough?
Employers will be responsible for paying employees full pay for all hours actually worked under flexible furloughing, including Employer National Insurance and Pension Contributions. The grant will then be available to fund the hours employees are not working, calculated by reference to their usual working hours in a claim period. Both the grant and the cap (as in place at the time of the claim) will be reduced proportionately to the hours worked. For example, in July, where an employee remains furloughed for 40% of his usual hours, the employer would be able to claim the grant for up to 40% of the £2,500 cap. -
How are usual hours calculated under the Flexible Furlough Scheme?
If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period. There are different calculations you can use to work out your employee’s usual hours, depending on whether they work fixed or variable hours.
Disclaimer - all information in this article was correct at time of publishing.
