Alerts

Flexible Furlough From 01 July 2020 – New Guidance

From 01 July 2020, only employees who have already been furloughed for three weeks will be eligible for flexible furlough. The Scheme will the taper until it closes (subject to further announcements from the government) on 31 October 2020.

July 2020

Employers will continue to be able to claim up to 80% of employees’ wages (capped at £2,500 per month), plus National Insurance and pension contributions, however the employer can agree any working pattern with the furloughed employee.  The employer must pay the employee their normal pay for any hours worked.

August 2020

Employers will continue to be able to claim up to 80% of employees’ wages (capped at £2,500 per month), however, they will have to pay employer National Insurance and pension contributions. The employer can agree any working pattern with a furloughed employee and must pay the employee their normal pay for any hours worked. The grant will be pro-rated to reflect furloughed hours.

September 2020

Employers will be able to claim up to 70% of employees’ wages (capped at £2,187.50 per month), and will also have to pay employer National Insurance and pension contributions. The employer can agree any working pattern with the furloughed employee and must pay the employee their normal pay for any hours worked. The grant will be pro-rated to reflect furloughed hours.

October 2020

Employers will be able to claim up to 60% of employees’ wages (capped at £1,850 per month), and will also have to pay employer National Insurance and pension contributions. The employer can agree any working pattern with the furloughed employee and must pay the employee their normal pay for any hours worked. The grant will be pro-rated to reflect furloughed hours.

The other main highlights are as follows:

  • Flexible furlough arrangements must be agreed in writing.
  • The way claims can be made is changing from 01 July and there will be a minimum claim period of one week.
  • There is an exception for employees returning for certain types of statutory leave e.g. maternity leave and they can be furloughed, even if they have not been furloughed before, provided the employer has previously made an application for a grant under the Coronavirus Job Retention Scheme.
  • Where employees are working flexibly, employers need to keep records of the hours employees are working.
  • Anyone starting a new period of furlough leave before 01 July 2020 must be furloughed for a period of three weeks.
  • Where employees are working flexibly from 01 July, the calculations to claim the grant are complex, however there is a new set of worked examples which can be found here.
  • The new Treasury direction, which contains the legal provisions of flexible furlough, has not been released as yet.

It is likely that many employers will be making decisions about returning employees to work in the coming weeks and where, unfortunately, they are considering redundancies, they should also bear in mind the obligation to consult on a collective basis where they are contemplating dismissing 20 or more employees in a 90 day period.

If you require any advice in relation to flexible furlough or redundancies, please do not hesitate to contact the employment team on 01228 552600.

This alert does not provide a full statement of the law and readers are advised to take legal advice before taking any action based on the information contained herein.

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