Flexible Furlough Scheme

Flexible Furlough Scheme

Last night, the Government released further details of the Flexible Furlough Scheme (careful with that acronym!) and while the Policy Paper highlighting the changes is brief it helpfully confirms:

“The Coronavirus Job Retention Scheme will close on 31 October 2020.

From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.

From 1 August 2020, the level of grant will be reduced each month. To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.

Wage caps 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.”

While further detail is contained in the original but updated Guidance.

In simple terms, employers will be able to claim the furlough grant for the hours their flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period. I expect we will see a huge uptake of the new scheme which will allow employers to gradually reintroduce staff on a part-time basis. A phased reintroduction is likely to suit both parties in most cases; with employers keen to keep costs to a minimum until demand for their products or services increases, and employees permitted to return on a phased basis, which should help them adjust to the new ways of working. Of course, you will need an employee’s agreement to return on a part-time basis and the arrangement should be confirmed in writing.

It is worth highlighting that 31 July 2020 is the last day that employers can submit claims for periods ending on or before 30 June 2020, and the first time an employer will be able to claim for days during July 2020, will be 1 July 2020.

Under the new scheme (so on or after 1 July 2020), employees can be furloughed for any period of time but, the period must start and end within the same calendar month and must last at least 7 days unless you’re claiming for the first few days or the last few days in a month. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it. Yes, this is starting to make my head hurt too. The real headache will be for those poor individuals having to process payroll and claim the grants. The calculations are complicated, particularly, if an employee has variable hours.

Helpfully, the Government has produced further guidance setting out the calculations including the following worked example. I expect those individuals with responsibility for payroll will be screaming the acronym on a regular basis over the coming weeks!

If you require assistance with flexible furlough, reintroducing your staff, redundancies or any other employment related issue, please contact James Twine on 01752 292351 or at jtwine@wolferstans.com

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