Furlough – Your Flexible Friend.

The Chancellor left it until the last day of May 2020 to provide some further detail 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. 

As expected, the first date of the pay period for employers making contributions to furlough pay is 1 August 2020.  However, those contributions are not nearly as much as some had predicted.  For August, employers will only have to contribute national insurance and pension contributions on furlough pay.  For September, they will also have to contribute 10% of wages (capped at £312.50) which is just one eighth of furlough pay.  When we get to October, the employer contribution increases to 20% of wages (capped at £625) amounting to one quarter of furlough pay.  The CJRS will then cease on 31 October 2020 and employers will be expected to fund an employee’s entire salary from that time on.

One of the complaints about the existing CJRS is that employers could only claim under the scheme if an employee was asked to carry out no work at all.  There was no option to ask an employee to work, say, three days each week and claim under the CJRS for the other two days.  However, the revised CJRS rules will permit employers to bring furloughed staff back into work on a gradual basis from 1 July 2020 (one month earlier than expected) whilst not losing the ability to receive some continuing financial support from the Government.  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 CJRS for any normal working hours not worked in any week.

Employers will need to agree with employees any new working arrangements as to hours and times of work.  This can be done week by week and employers will be required to provide details of all hours worked when claiming the CJRS grant under the revised scheme rules.  As with the current scheme rules, any such arrangement must be confirmed in writing – email will do.  If employers wish to re-engage their furloughed staff on reduced rates of pay, this will need to be agreed too.

The current £2,500 cap on the CJRS grant will be reduced in proportion to the hours not worked under the revised scheme.  We will find out further information on 12 June 2020 about how the flexible furlough scheme will operate and how to calculate claims. 

However, before the Government gives us that further information, a very important deadline will have passed.  The revised scheme will only be available for those staff who have already been furloughed for the minimum three week period prior to 30 June 2020.  That means that 10 June 2020 will be the last date when employers can furlough members of staff for the first time.  In due course, employers must also have submitted any CJRS claims for the period up to 30 June 2020 by 31 July 2020.

What to do now:

  • If appropriate, furlough staff for the first time by 10 June 2020 if you might want to furlough them flexibly after 1 July 2020
  • Consider how you might make use of flexible furlough, perhaps in conjunction with social distancing arrangements if staff must return to the workplace
  • Examine what changes may need to be made to terms and conditions of employment for furloughed staff returning to work

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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