Flexible Furlough Guidance Issued
The Furlough scheme (Coronavirus Job Retention Scheme), has been in place since March 2020 and has enabled businesses to retain staff who would otherwise had been made redundant.
The government announced changes to the Job Retention Scheme and as has been the case during the pandemic, on Friday evening the government issued further guidance on how the new Coronavirus Job Retention Scheme flexible furlough arrangements will work from 1 July 2020.
The key points to note are:
- Only employees who had been furloughed for a minimum of 3 weeks prior to 30 June 2020 are eligible to be furloughed.
- However, employees who return to work following a period of family related leave and who had not been furloughed prior to 30 June 2020 are still permitted to access the Scheme.
- Whilst flexibly furloughed employees can do some work for the employer during the week and spend the remainder on furlough.
- The parties need to enter into a new written agreement setting out the hours/days that the employee will work whilst flexibly furloughed. This letter must be kept on file for at least 5 years (6 maybe safer) in case HRMC wish to audit (which they will). It is important for employment law and HRMC purposes that a written agreement is signed and a copy kept by both parties. It is a change of contract.
- When the employee is working, they must be paid in full with the employer claiming for the time spent not working via the Scheme.
- The minimum 3 week furlough period will no longer apply from 1 July 2020 (but claims to HMRC can only be for a minimum period of 7 calendar days each).
- From 1 August 2020 the tapering arrangements take effect and employers will be required to contribute to furloughed employees wages in order to access the Scheme. This tapering will be:
- August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay Employer (ER) NICs and pension contributions.
September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
- October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
- The Scheme is due to end on 31st October 2020.
You can read the updated guidance https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
For further information contact Ashley Heeley HR Consultant at firstname.lastname@example.org