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Flexible furlough scheme

By now I am sure we’ve all heard of the Job Retention Scheme and understand what it means, but it you do need a reminder take a look at our archived articles for further information.

The scheme continues to be updated by the government and we therefore set out in this article details of flexible furloughing - which employers have been eagerly awaiting details on. 

Please note you should review your furlough position for all your team BEFORE 10th June 2020.

What is flexible furloughing?
This is where employers can, from 1st July 2020, decide the hours and shift patterns that employees will work on their return and employers will be responsible for paying their wages in full while working.  This means that employees can work as much or as little as your business needs, with no minimum time that you can furlough staff for.

The working hours agreed with your employee must cover at least one week and be confirmed to the employee in writing.
What do the new rules mean in practice?

From August, the government grant provided through the job retention scheme will be slowly tapered.

  • In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for those employees who are not working and are furloughed.
  • From 1st August, government payments remain as before (80% up to the cap of £2,500) but employers will be required to pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
  • From 1st September, the government’s contributions to the furlough wages will fall to 70% of wages up to a cap of £2,187.50 for the hours the employee does not work.  Employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
  • From 1st October, the government’s contribution falls to 60% of wages up to a cap of £1,875 for the hours the employee does not work.  Employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500. 
  • On 31st October – the furlough scheme closes.

So in summary, there are some important points to remember.

  • The scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30th June.  This means that the final date that you can furlough an employee for the first time will be 10th June for the current three-week furlough period to be completed by 30th June.
  • In addition, from 1 July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward.   Employers will have until 31st July to make any claims in respect of the period to 30th June.
  • From 1st July, the scheme will only be available to employers that have previously used the scheme in respect of employees they have previously furloughed.
  • It is also worth noting, the number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS. 
  • Finally, employers can continue to make claims in anticipation of an imminent payroll run, at the point payroll is run or after payroll has been run.
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