3rd July 2020
Flexible Furlough Arrangements
From July 2020 onwards, furloughed workers will be able to return to work and carry out that work for any amount of time and under any flexible pattern.
The employer will be paying the full employment costs for the period they work part time and job retention scheme grants may be claimed for hours not worked. For instance if a staff member normally works full time but you only need them for three days, they remain furloughed for the remaining two days. As such you will pay them 100% of their normal pay for the hours worked and 80% Furlough pay for the normal hours that are not worked, unless you wish to top them up to their normal 100% pay whilst they are furloughed.
A new written agreement will be required with the employee, to confirm the new flexible furloughing arrangement.
Employers will still be able to claim Job Retention Scheme payments for normal hours not worked by their employees. The minimum claim for furlough pay in this regard is seven days per employee over the monthly claim period.
Funding of the Scheme
The government confirmed recently that this scheme would be extended to October 2020. However, from August 2020 onwards, employers will be required to start to contribute to the cost of this scheme.
The way the scheme will be funded will change each month from August 2020 onwards and may be summarised as follows:
August – Employers must start paying pension contributions and Employers National Insurance of furloughed staff.
September – In addition to the above, employers must also pay 10% of the wages of furloughed staff. The government will pay 70% of the monthly wage of a furloughed employee (capped at £2,190).
October – An employer must pay 20% of the wages of furloughed staff members. The government will pay 60% of the monthly wage of a furloughed employee (capped at £1,875).
Limitations on Numbers that may be Furloughed
The number of staff furloughed in any period from 1 July 2020 onwards cannot exceed the maximum number of staff you claimed for under the old scheme.
Claim Periods
All claims under the old scheme (up until 30 June 2020) must be submitted by 31 July 2020. If you have a staff member whose period of furlough covers both June and July, separate claims will need to be submitted. This is despite the fact they may have been furloughed across this period, without any return to work.
A claim period covers the days the grant is being claimed for. Post 1 July 2020, claims must start and end in the same month and must last at least seven days. HMRC recommend that a claim is not made until you are aware of the exact hours your staff will have worked in a claim period.
Working out the Pay
If your staff do not return to work, then the calculations are as per normal. However, from August onwards (see above) the employer’s level of contributions will increase.
If staff return to work on a part-time basis, there will be a need to work out how many hours each employee normally works. This total is then offset against the number of hours they have been furloughed for.
One of the first steps is to ascertain if the employee works on fixed contract or if they have variable hours as this determines the calculation to use. The calculation is not straightforward and HMRC have provided examples as per the link below:
Job Retention Scheme Deadline
This scheme closed to all new entrants on 30 June 2020. From 1 July 2020 onwards, an employer can only claim under this scheme for an employee who has been furloughed for the full three-week period prior to 30 June 2020.
There is an exception to this rule for parents returning to work after taking maternity, shared parental leave or parental bereavement leave.
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