Flexible furlough update published

On 12 June the government updated its Coronavirus Job Retention Scheme guidance.

The scheme will close on 31 October 2020.  Apart from small reductions to the grant (see further below) perhaps the key feature is this (our highlighting in bold):

“From 1 July, you will be able to:

• only be able to claim for employees who have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June
• be able to flexibly furlough employees – this means you can bring your employees back to work for any amount of time, and any work pattern
• still be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.”

We need to keep an eye out for more detailed requirements within any formal Direction from the Chancellor of the Exchequer, but the highlighted words may offer a lot of flexibility for employers to take advantage of the scheme.

There will, for example, be many employers tempted to ascribe summer holidays to be ‘furloughed’ time.  It will depend on individual circumstances whether or not to do so may be considered proper or an abuse of the scheme.   (As for the £6.46 billion cost of the furlough holidays, read more here.)

Otherwise, the government has set out the way in which the grants under scheme are being very reduced gradually.  It becomes rather complicated, but you will eventually work out how it applies to particular patterns of work.  Detailed guidance on the grant payments can be found here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

 Other changes to the scheme

A summary of the changes to the scheme is here, but includes the following:

“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.

The timetable for changes to the scheme is set out below. 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:

• There are no changes to grant levels in June.
• For June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
• For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
• For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
• For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.”