Tughans Solicitors

Details released on flexible furlough scheme

On Saturday 13 June, the Government updated the Coronavirus Job Retention Scheme with much anticipated details on how “flexible furlough” will operate and further clarification on how the Scheme will wind down. The key details are below.

 

Scheme updates

  • The Scheme is closed to new entrants, with limited exception. From 1 July, it will only be possible to claim for employees who have previously been furloughed for three weeks by 30 June. This includes employees who are working at this date but have already been furloughed for at least three weeks.

 

  • The only exception to the Scheme’s closure to new entrants is where an employee is returning from maternity or other parental leave.

 

  • The number of employees claimed for after 1 July cannot exceed the number claimed for in any claim before that date.

 

  • All claims relating to the period before 30 June must be made by 31 July.

 

  • From 1 July onwards, claims must start and end in the same calendar month. Multiple claims can be made inside a particular month, so long as they relate to a period of seven days or more.

 

  • The minimum three-week furlough period will be removed from 1 July. This will allow employers to implement more regular rotating furlough arrangements.

 

Flexible furlough

 

  • “Flexible furlough” means that employees can work a portion of their normal working hours and be furloughed for the remainder. For example, an employee could work from Monday to Wednesday and be furloughed for Thursday and Friday. This will be allowed from 1 July.

 

  • Employers must agree a flexible furlough arrangement with their employees. There is no restriction on the working pattern which can be agreed.

 

  • Employers must pay employees their normal salary for the time they spend working. The time spent on furlough can still be reclaimed under the Scheme.

 

  • The maximum claimable amount for each employee will be calculated proportionately to the number of hours they are furloughed. E.g. an employer will be able to claim 60% of the £2,500 cap if the employee is placed on furlough for 60% of their usual hours.

 

  • Calculating the amount claimed for a flexibly furloughed employee is subject to complex rules which are compounded by the new requirement to make claims within the calendar month. The Government has updated its online calculator and provided worked examples.

 

  • The flexible furlough scheme has not replaced the original, full furlough scheme. Employers can choose which to use.

 

  • Employers who make use of flexible furlough must keep appropriate records of their employees’ usual and actual hours worked, for a period of six years. This indicates that HMRC may audit use of the Scheme in due course.

 

  • Employers who have operated a rotating furlough system should be mindful that an employee who has previously been furloughed and begins a new full furlough period of at least three weeks after 10 June (but before 1 July) cannot be flexibly furloughed until they have completed this period.

 

Please contact Jack jack.balmer@tughans.com or your usual Tughans contact, who can refer you to the employment team.

 

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.