July 7

Flexible furlough….what employers will pay and top tips to navigate the new scheme….

What employers will pay under the new scheme

June and July:

• Employers are not required to pay anything.
The government will pay 80% of wages up to a cap of £2,500 as well as Employer National Insurance and pension contributions.

August:

Employers are required to pay:
• Employer National Insurance
• Pension contributions
The government will continue paying 80% of wages capped at £2,500.

September:

Employers are required to pay:
• Employer National Insurance
• Pension contributions
• 10% of wages to make up the 80% total to a cap of £2,500
The government will pay 70% of wages up to a cap of £2,187.50.

October:

Employers are required to pay:
• Employer National Insurance
• Pension contributions for furloughed employees
• 20% of wages to make up the 80% total to a cap of £2,500
The government will pay 60% of wages up to a cap of £1,875.

Top tips to navigate through the new flexible furlough scheme

1. Who is eligible to be furloughed under the new scheme?

Only employees who have been furloughed for at least three weeks on or before 30 June under the old scheme can be furloughed after 1 July. The only exceptions to this are where parents return to work after taking maternity, shared parental leave, adoption, paternity or parental bereavement leave.

2. Duration of furlough

From 1 July, you’ll be able to bring back previously furloughed employees for any amount of time and on any pattern of work and claim a grant for the hours not worked.

The last date anyone could be furloughed for the first time was 10 June. If you furloughed any employee on that date, you’ll be able to move them onto the new scheme immediately from 1 July.

However, it is now clear that if you re-furlough someone after 10 June, you will have to wait the full three weeks before you can move them onto the new scheme, regardless of whether this ends after 1 July.

3. Limits on numbers of people you can furlough from 1 July

The numbers of employees you can furlough in any period starting from 1 July can’t exceed the maximum numbers of employees you claimed for under the old scheme – although you don’t include returning parents in this calculation.

This may create some difficulties for employers who have already put in place rotating furlough patterns. For example, if you have divided your 200-strong workforce into two groups of 100 each and rotate them on three-weekly furlough, you won’t be able to put all 200 workers on flexible furlough so that everyone works half a week.

4. Claim periods

You must submit any claims under the old scheme by 31 July. After 1 July, you can’t submit claims that cross calendar months. This means that if you have staff whose furlough spans June and July, you’ll need to submit separate claims for June and July – even if they have been furloughed continuously.

5. Working out pay under the new scheme

If you don’t intend to ask staff to return to work, your pay calculations won’t change, although your contribution will increase from 1 August 2020.

However, if your staff do return to work part-time you’ll need to work out how many hours each employee usually works and off set this from the number or hours they have been furloughed.

You will need to decide if your employee has fixed or variable hours. If their pay depends on the number of hours they’ve worked, or they are not contracted to work a fixed number of hours, use the variable calculation. The government has provided some examples of how to do this.

6. Keeping records

You’ll need to keep a copy of all records for six years including:
• the amount claimed and claim period for each employee
• the claim reference number
• your calculations
• for employees who are flexibly furloughed, their usual hours including any calculations and the actual number of hours they have worked.

7. Written agreement

The guidance states that you need a “new written agreement” to confirm the new furlough arrangement. GoodHR can assist with a flexible furlough agreement…..

For any queries or assistance please get in touch nicola.goodridge@goodhr.co.uk or +44(0)7917 878384