Furlough Scheme Extended -Update
The furlough scheme has been extended. It was created to protect employees during the coronavirus pandemic.
The government provided an update on the 29th May on how the furlough scheme would evolve. In particular flexible furloughing, with the promise that further details would follow.
From July, employees can work part-time. While being furloughed for hours they don’t work and employers will have to pay normal pay for the hours that employees work. Moving into August, employers will need to start contributing to wage costs (to a maximum of 20%t by October), whether or not the employees are working.
Flexible furlough Key Points:
No new employees can now be furloughed: Unless they are returning from statutory maternity/ parental leave.
No minimum furlough period: Employees can work part-time for any hours or shift patterns. Agreed between employers and employees unless they are within the shielded group
Employers will pay for any hours worked: Employers can claim a furlough grant to cover the balance between hours worked and employee’s contracted hours.
What is “flexible furlough”?
From 1 July, employers can bring furloughed employees back to work for any amount of time and any work pattern. While still being able to claim under the job retention scheme grant for any hours not worked.
It will continue to be possible to fully furlough employees or to rotate employees on and off furlough. As long as they have been previously furloughed.
Whilst fully furloughed, employees will not be able to do any work for an employer.
Who is eligible under the new flexible scheme?
Only employees who have been previously furloughed will be eligible to be furloughed after 1 July. This will cover anyone who has been on furlough. For at least three consecutive weeks between 1 March and 30 June 2020.
It is no longer possible to furlough new employees who have not previously been furloughed.
The exception to this are any employees returning from statutory parental leave after 10 June. This includes maternity, paternity, shared parental, adoption or parental bereavement leave. These employees will be eligible to be furloughed after 10 June. Even if they are being furloughed for the first time.
How Many Can Be Furloughed?
The amended guidance has introduced a new maximum number of employees for which employers can claim. Employers cannot exceed the maximum number of employees on furlough at the same time in any period prior to 30 June.
This could potentially create issues for employers who previously rotated employees on and off furlough. But who might now wish to have everyone working part-time.
Alternatives For Furloughed Employees?
One possible alternative, now that there is no longer a minimum furlough period is for employers to put in place a more frequent rotation of staff, for example, one week on furlough and one week off. Which means employees are on “standard” furlough arrangements. This would mean the employees remain on the “standard” furlough arrangements while giving some flexibility and the employer would not need to use the official flexible furlough scheme and the calculations that go with it.
Contributions increasing in August
The furlough grant being paid by the government will be tapered off. From August, employers will need to start paying employer pension contributions and National Insurance Contributions again.