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Seven important things to know about the new flexible furlough rules

with you on the journey to a brighter future

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1. Who can I place on flexible furlough?

From 1 July 2020 only employees that you as an employer have claimed for previously will be eligible for more grants under the Job Retention Scheme.

This means they must have previously been furloughed for at least three consecutive weeks taking place any time between 1 March and 30 June 2020.

2. How do I place an employee on flexible furlough?

You need to discuss this with your employee and outline which hours they will be expected to work. Staff will need to agree on the arrangements of their part-time work.

This agreement should be confirmed in writing and a written record kept of it for five years. 

3. How long must the flexible furlough last?

Previously, staff needed to be furloughed for at least three weeks to benefit from the scheme however this has changed and now the flexible furlough agreements can last any amount of time.

Having said this the period that employers claim for must be for a minimum period of seven calendar days. Employees can enter into a flexible furlough agreement more than once.

4. How much can I claim under the furlough scheme?

The scheme will allow employers to recover the remainder of wages to a maximum cap. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.

The amount that the scheme will cover will begin to decrease from September 2020, and employers will be responsible for all of the national insurance and pension contributions from August 2020, regardless of the employee being on flexible furlough.

5. What records should I keep?

You will need to keep records of how many hours your employees work and the number of hours they are furloughed during flexible furlough. This is very important.

6. How do I calculate the hours worked?

There are two different calculations you can use to work out your employees’ usual hours, depending on whether they work fixed or variable hours.

Where the employee’s working hours are fixed, or their pay does not vary with the number of hours worked, the reference period for calculating their hours is the hours your employees were contracted for at the end of the last pay period ending on or before 19 March 2020, so in most cases 29th February if paid monthly.

Where an employee works variable hours, employers will use the higher of:

  • the average number of hours worked in the tax year 2019 to 2020; and
  • the corresponding calendar period in the tax year 2019 to 2020.

7. When will the furlough scheme end?

The scheme will come to an end on 31st October and at that time you will either have to either start your workers on their normal full time hours, agree reduced hours / change of working contract (if changing to part-time) or consider termination or redundancy. If you consider redundancy then all the normal rules of redundancy pay will apply.

It’s important that as an employer you get to grips with the new rules now that they have changed as future claims are likely to be more involved and complicated as the scheme runs down to an end on 31st October 2020.

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