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What is flexible furlough?
- AuthorEmployment Team
Update: On 3rd March 2021, Rishi Sunak announced in his Budget that furlough leave would now be extended until the end of September 2021.
On 31 October 2020, it was announced that the Coronavirus Job Retention Scheme would be extended until the end of March 2021. You can find out more about the extension in our latest Updated Coronavirus Job Retention Scheme Guidance article.
The Government has further announced that the Coronavirus Job Retention Scheme (CJRS) has been extended to the 31st October 2020, with additional changes to the existing rules from 1st July 2020. In essence, the revised rules ("flexible furlough") enable an employer to bring their employees back to work where they have been previously furloughed, or place them back on furlough leave if they have already returned to work, for any amount of time and any shift pattern, while still being able to claim a CJRS grant for their normal hours not worked. Our Employment Law team reviews the changes, explaining how this allows employers to have more flexibility to adjust their staffing levels as the needs of their businesses change, as well as highlighting some of the key changes.
What is different in the new flexible furlough scheme?
One of the differences under the new scheme is that the length of time that an employee can be furloughed has now changed. Prior to the 1st July, employees had to be furloughed for a minimum of three consecutive weeks at a time. The revised rules now allow you to choose how long you wish to furlough your staff for each week. This gives greater flexibility to arrange the days and shifts you require your employees to work each week. You should discuss working arrangement with your employees, and keep a written record of any new flexible working patterns.
It is your responsibility to pay staff their usual contractual salary for hours worked. Only for time spent on furlough leave can the employee expect to receive 80% of their usual salary, which is recoverable in accordance with the Job Retention Scheme rules. Further scheduled changes over the coming months include:
- From 1st August you will be responsible for paying National Insurance and pension contributions.
- In September the percentage of wages the Government will pay for furloughed employees will be reduced to 70%. You will then be expected to make up the 10% difference so that furloughed employees still receive 80% of their contractual pay.
- In October the percentage the Government will pay will be further reduced to 60%. Again, employers must make up the difference, and will therefore be responsible for contributing 20% of furloughed employees’ pay.
Eligibility for flexible furlough
The revised scheme is only available to those employees that had been furloughed for at least three weeks by the 30th June. Therefore, an employee being furloughed for the first time, must have been placed on furlough leave by the 10th June, with the exception of parents returning to work following statutory family leave. If an employee was re-furloughed after 10th June, they will need to complete three weeks furlough before being eligible for the flexible furlough scheme. For example, if an employee was re-furloughed on 16th June, the earliest they could be switched onto the flexible scheme is 6th July.
You should also be aware that the maximum number of employees you may claim for in any single claim period cannot exceed the maximum they had previously claimed in a single claim period under the old scheme.
Again, there is an exception for parents returning from statutory family leave, who do not need to be included in this calculation.
How to calculate a claim for furlough leave
The following criteria now applies when making arrangements for claiming furlough leave under the new scheme:
- From the 1st July, claims must begin and end in the same calendar month, so by way of example, if you furlough your employee from 13th June to 3rd July, you will need to submit two claims, even though the employee was continuously furloughed for that period.
- Claim periods must be for a minimum of seven days, unless you are claiming for a period that crosses months as outlined above.
- You are only entitled to make one claim per claim period, so all those that are furloughed within that period will need to be included, regardless of whether or not they have been furloughed at different times within the claim period.
How to submit a claim for furlough leave
Claims under the original furlough scheme can be submitted online up until the 31st July.
From the 1st July, an employer claiming on behalf of a hundred or more employees will be able to download a template form from the HMRC website which can simply be uploaded with their claim.
In accordance with the guidance, you are required to keep a record for at least six years of the following details:
- the amount claimed and the furlough leave periods for each employee
- the claim reference number
- summary of the calculations
- for those employees that are furloughed under the revised flexible furlough scheme, details of their usual contracted hours, including any calculations as well as the actual number of hours worked.
Future changes to the furlough scheme
The switch to flexible furlough is part of a broader plan to gradually reduce the amount being paid by the Government before the scheme comes to an end on the 31st October 2020.
It is likely that the published guidance on the CJRS will be further updated and that additional guidance or legislation may be published, clarifying aspects of the scheme.
For more information on the flexible furlough scheme, or if you have further questions regarding coronavirus related employment law, you can contact our team today on 023 8071 7717 or email email@example.com. We are currently working remotely and so can answer your questions via email, telephone or video conferencing facilities.
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This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.