Overnight on 12 June 2020, the government released guidance on the two significant changes it is making to the CJRS, namely:
permitting furloughed employees to return to work on a “flexible” basis; and
tapering the amount of the grant employers can claim in respect of furloughed employees’ wages.
What is “Flexible” Furlough?
From 1 July 2020, flexibly furloughed employees will be able to perform some duties for their employers during allocated working hours.
Employers will be able to agree with furloughed employees, to bring them back to work on such hours as suit the current needs of their businesses, while still being able to claim a grant under the CJRS with respect to the remainder of the employees’ usual working hours for which they remain furloughed.
The key points:
- Employers will be responsible for paying employees’ wages whilst they are working, as well as the employer NICs and pension contributions due on those wages.
- If an employer does not require its employees to return on a “flexible”, “reduced hours” basis, then they can continue to claim the available grant for their “fully furloughed” employees’ until the CJRS closes on 31 October 2020. However, the amount of the grant available with respect the hours an employee is on furlough is to be slowly tapered (see below).
- From 1 July 2020 until close of the scheme, claims can only be made with respect to the wages of employees that have previously been furloughed for three weeks. Therefore, employers will not be able to claim for the wages of any employees that were not placed on furlough before 10 June 2020 (with the exception of those returning from statutory parental leave who will be able to be furloughed for the first time after this date).
- With respect to those employees who are eligible to be placed on furlough from 1 July 2020 however, there will no longer be a minimum furlough period of three weeks.
- Employees can work for proportions of their usual working week or month. Any amount of time and any pattern is permitted and you can enter into a flexible furlough agreement more than once.
- Any claim through the CJRS portal must be for a minimum one week period.
- Employers should discuss any changes with their staff and seek their agreement. Although a written response is not required, a written record should be kept of the new arrangement for 5 years.
- Records of hours worked and hours furloughed kept should be kept.
Tapering of Support and Employer Contributions
From 1 July to 31 July 2020 (as it has done up until this date), the government will pay 80% of a furloughed employee’s wages, up to a monthly cap of £2,500, as well as employer NICS and pension contributions on those wages.
From 1 August 2020 to 31 August 2020, the grant available in respect of a furloughed employee’s wages remains the same, however, employers will be required to pay the employer NICs and pension contributions due on such wages.
From 1 September to 30 September, the government will pay 70% of a furloughed employee’s wages up to a cap of £2,187.50. As well as paying the employer NICs and pension contributions due on such wages, employers will be required to top up the furloughed employee’s wages to ensure they receive 80% of their wages up to a cap of £2,500.
From 1 October until close of the CJRS on 31 October, the government will pay 60% of a furloughed employee’s wages up to a cap of £1,875. As well as paying the employer NICS and pension contributions due on such wages, employers will be required to top up the furloughed employee’s wages to ensure they receive 80% of their wages up to a cap of £2,500.
Where an employee is “flexibly” furloughed, all the aforementioned caps are proportional to the hours not worked.
- The full government revised guidance is available here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
- Guidance on steps to take before calculating your claim using the Coronavirus Job Retention Scheme is available here: https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme
- Guidance on calculating how much you can claim using the Coronavirus Job Retention Scheme is available here: https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme
This information is correct at the time of publication on 16 June 2020. If you have any questions on the flexible furlough scheme, require assistance with a flexible furlough agreement or employment law generally, please contact Melanie Rowe on 07854 029922 or by email at email@example.com