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Flexible Furlough - FAQs

On 1 July 2020, the Coronavirus Job Retention Scheme (CJRS) entered a new phase which allows employers to bring furloughed employees back to work part-time. Whereas, prior to 1 July, furloughed employees were not allowed to carry out any work for their employers.

Employees can be brought back to work for any number of hours, on any shift pattern. However, there is no obligation to bring furloughed employees back to work – they can also stay on furlough full-time.

Who’s eligible?

Only employees who had already been furloughed for at least three weeks, between 1 March and 30 June 2020, are eligible for furlough from 1 July 2020. The CJRS, therefore, closed to new entrants on 1 July 2020 (with certain exceptions for employees returning from statutory parental leave). The number of employees an employer can claim for after 1 July 2020 must be no more than the total number of employees they claimed for between 1 March and 30 June 2020.

To calculate flexible furlough pay, you must ascertain:

  • The employee’s normal working hours: for employees with fixed hours, this will be the number of hours the employee was contracted for at the end of the last pay period ending on or before 19 March 2020 e.g. 40 hours per week. For employees with variable hours, this will be the higher of the average number of hours worked over the tax year 2019 to 2020, or the number of hours worked in the same calendar month in the tax year 2019 to 2020;
  • The new flexible working pattern e.g. 4 days a week;
  • The relevant claim period (at least seven days);
  • 80% of the employee’s wages received in their last pay period on or before 19 March;
  • The number of hours worked and the number of hours not worked by the employee during the claim period;
  • From 1 September 2020, the proportion of furlough pay payable by HMRC and the proportion payable by the employer.

The calculation will change between July and October, as the employer’s contribution to furlough pay increases (see question 6. below).

Use the Government’s furlough pay calculator here to find out how much employees must be paid.

No, since 1 July 2020 there is no longer a minimum furlough period. There will therefore be less of an obvious distinction between being ‘on’ and ‘off’ furlough. However, claims must cover a period of at least seven days.

You should already have a written agreement with employees who were put on furlough between 1 March and 30 June 2020. You will now need a new written agreement with each employee on flexible furlough, confirming the new working arrangement. You must keep a record of all of these agreements for five years in case HMRC decides to carry out an audit of your business.

You may not need a new agreement if you intend to keep your employees on full-time furlough (not back at work), and if your original agreement extended beyond June 2020.

Employees on flexible furlough will still receive 80%/up to £2,500 per month of their normal pay, until the scheme ends (currently due to end on 31 October 2020.) Employers will pay 100% of this for days that their employees are back at work. Payment for days that employees are ‘on’ furlough and not at work will continue to be claimed back through the CJRS. From August 2020, employers are being asked to make a contribution towards furlough pay.

  • From August, the Government will continue to pay 80%/up to £2,500 of furloughed employees’ normal pay, but employers must begin paying National Insurance and pension contributions;
  • From September, in addition to NI and pension contributions, employers must also pay 10% of employees’ furlough pay (capped at £312.50), whilst the Government will pay the other 70%.
  • From October, in addition to NI and pension contributions, employers must now pay 20% of employees’ furlough pay (capped at £625), whilst the Government will pay the other 60%.

UK Government advice on flexible furlough: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

UK Government flexible furlough pay calculator: https://www.tax.service.gov.uk/job-retention-scheme-calculator/?_ga=2.16357174.1291120991.1587371920-778629040.1580374300

Letter templates for extending furlough, ending furlough and putting employees on flexible furlough: https://www.acas.org.uk/furlough-letter-templates

If you are an employer and have any further questions, please contact the Holistic HR Team at MBM Commercial LLP by following this link: https://mbmcommercial.co.uk/employment-law-hr-support.html.  Visit MBM's Coronavirus hub for regular updates.

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