Flexible furloughing

Flexible furloughing – what’s happening next?

Updated – We’ve updated our flexible furloughing guidance based on the revised information issued by HMRC on 12th June 2020. This guidance has clarified how payments can be calculated. For further information, you can get the HMRC guidance here.

What's changed with the guidance?

The revised guidance has brought clarity on

  • minimum claim periods (7 calendar days from July) 
  • that employers will be responsible for National Insurance (NI) and pension contributions on the portion of salary that they pay. 
  • wage caps are proportionate to the hours not worked (eg you can claim up to £2,500 for a full week but up to £1,000 for 2 days).

The original flexible furloughing blog

On Friday, the Chancellor made his much awaited announcement on the next phase of the furloughing scheme. The announcement brought some surprises, such as the flexible furloughing scheme which starts in July. It also confirmed that employers will be asked to contribute to the furloughing scheme from August. However, the contributions will be phased which is good news for business.

What is flexible furloughing?

Flexible furloughing

From 1st July 2020, employers will be able to bring back employees on a part time basis. The employer has total decision rights on what the working pattern will be. However it should be confirmed in writing to the employee. 

This ‘flexible furloughing’ will involve employers picking up the bill for the hours that the employee works but the taxpayer will fund 80% of the remaining hours. The flexible furlough scheme will be available on a minimum claim period of 1 week.

Example situation

Jill is employed on a full time basis working 35 hours a week over 5 days earning £2,000 a month. She has been furloughed since April 1st but her employer wants to bring her back for 2 days a week from July 1st. The employer will pay her salary (£800) plus National Insurance and Pension contributions for those 2 days a week.

The taxpayer will then repay the portion of the week on furlough (£800 per month) with Jill receiving £1.600 a month in total (80% of salary).

From August, the employer will pick up all NI and pension contributions.

From September, the employer would only be able to claim back 30% of salary, declining to 20% in October.

 

Closure of the furlough scheme

Flexible furloughing

The furlough scheme will close to new entrants from 1st July 2020. To qualify for further payments, the employee must have been furloughed for at least 3 weeks by this date.

Practically, this means that the latest date you can furlough your employee is 10th June. Claims for the period up to 30th June would then be paid by the end of July.

You will also not be able to claim for more people than you’ve previously claimed for. Eg if you claimed for 20 before June 30th, then your July claims can be for no more than 20 employees.

Employer contributions for fully furloughed staff

From August 2020, the taxpayer will start to reduce contributions as per the below table. Note this only applies to fully furloughed staff. The calculation is more complex for flexible furloughed staff.

Flexible furloughing

So the impact on employers is staged and this will hopefully mitigate against the need the need to make redundancies.

Self employed scheme

The self employed scheme will also make one further payment in August. Capped at £6,570 in total, the scheme will pay out 70% of average monthly trading profits for the last 3 months. This will be the final payment under the scheme.

Where can I get more information?

Nicci Birley, Rob Birley. Cornerstone Resources

Visit our Coronavirus Job Retention Scheme hub for more information on the furlough scheme.

If you have other HR needs such as you need to plan a redundancy programme, contact Rob on 07494 161169 or Nicci on 07908 875146 for further information on how we can help you.

Alternatively, click here for more details of our Outsourced or project based HR support. 

2 thoughts on “Flexible furloughing – what’s happening next?”

  1. Could I check please? A member of staff previously furloughed now back in the office full time (because flexi furlough isn’t in yet) – can I furlough them again if need be so long as it’s for at least 3 weeks? Or can I massively reduce their hours from 1st July and pay them 100% for the hours they work and the government pick up the 80%?

    1. Hi Ali yes you can refurlough them as long as they are furloughed for a minimum of 3 weeks and they have been furloughed for at least 3 weeks before 1st July. And yes you can then use the flexi furlough from July – the claim period is a minimum of 1 week so you should be able to make as many changes as you need for your employee. Just remember to confirm the changes in writing to your employee! Thanks Rob

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