Flexible Furlough
Back to NewsOn Friday 29 May, the Chancellor Rishi Sunak announced a series of changes to the Government's furlough scheme, including workers being able to go back part-time from July. Here's what you need to know.
FLEXIBLE FURLOUGH
From 1 July 2020, businesses will have the flexibility to bring previously furloughed employees back to work part-time with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.
Businesses can decide the hours and shift patterns that employees will work on their return and businesses will be responsible for paying their wages in full while working. This means that employees can work as much or as little as businesses need, with no minimum time that you can furlough staff for.
Any working hours arrangement that has been agreed with employees must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, you will need to report and claim for a minimum period of a week.
FURLOUGH EMPLOYER CONTRIBUTIONS
From August, the government grant provided through the job retention scheme will be slowly tapered.
- in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
- in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
- in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
- in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
the cap on the furlough grant will be proportional to the hours not worked.
For smaller employers, some or all of your employer NIC bills will be covered by the Employment Allowance, so businesses should not be significantly impacted by that part of the tapering of the government contribution.
IMPORTANT DATES
It’s important to note that the scheme will close to new entrants from 30 June. From this point onwards businesses will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June.
This means that the final date that businesses can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
PROTECTION FROM SCAMS
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search 'scams' on GOV.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.
Further support for employers and agents on how to calculate claims with this extra flexibility will be available by 12 June
As ever, if you have any questions, queries or need assistance with any of the above then we are here to help.
Take care and stay safe
