Flexible Furlough Scheme – The Devil’s In the Detail.

As of 7 June 2020, the Treasury has said that around 8.9 million workers are now covered by the Government’s furlough scheme.  These workers represent more than a quarter of the UK workforce at a cost so far of £19.6bn.  In the South East outside London, 33.8% of workers in Crawley have been furloughed and the figure for Feltham and Heston is 37.8%.  These airport neighbouring areas both fall in the top 10 areas worst affected in the country.

Last Friday, the Government provided more information about the availability of part-time furlough for those employers already claiming under the Coronavirus Job Retention Scheme and how employers would be required to contribute to the scheme going forward.  HMRC also updated their guidance, which is now split into five updated sections and three brand new sections.

In my last bulletin, I set out the basic details of the flexible furlough scheme (FFS), including the contributions which employers will have to make from 1 August 2020 and the fact that flexible furlough arrangements will allow staff to work any number of days, any amount of time and on any shift pattern.  For any hours worked, they will be entitled to receive their normal rate of pay.  Employers will then be able to claim under the FFS for any normal working hours not worked in any week. 

We now know that employers will only be able to claim for period of 7 days or more within a claim period which must start and end in the same calendar month … unless your claim is for the first or last few days in the month (which must include the first and last day of the month respectively) and you have already claimed for the period ending immediately before it.  You really will need to read the new rules and your head will hurt!

Please be aware that, if a previously furloughed employee commenced a period of furlough leave before 1 July 2020 in the second half of June, the employee must complete a minimum three week period of full furlough before they can be flexibly furloughed.

In due course, employers must also have submitted any Scheme claims for the period up to 30 June 2020 by 31 July 2020.  Claims for July onwards can’t be processed before 1 July 2020 (as employers will need to know how many hours the employee has worked in the relevant claim period) and will only be able to include days from one particular calendar month.

Wage caps for flexible furlough are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.  HMRC’s guidance sets out some worked examples to assist with payroll calculations. When the Government first announced changes to the scheme rules, they made it clear that it would only apply to staff who have already been furloughed for the minimum three week period prior to 30 June 2020.  That meant that 10 June 2020 was the last date when employers could furlough members of staff for the first time.  Since then, the Government has permitted one exception to this rule which is that staff returning from maternity, paternity, shared parental, adoption and parental bereavement leave may be furloughed even if they had not been first furloughed before the 10 June deadline.  Other than these staff returning from statutory family leave, an employer will not be able to furlough more staff in a month from July onwards than the maximum number which were included in any claim submitted prior to July.

The contents of this article are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this article. © Mundays LLP.

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