Job Retention Scheme - 'Flexible Furlough' from 1 July
From 1 July the first of a number of proposed changes to the Job Retention Scheme commences, being the introduction of ‘flexible furlough’.
The aim of the amendment is to encourage the phased return of employees to work as the government seeks to boost the economy in light of the Coronavirus outbreak, in that it allows employers the flexibility to maintain staffing levels that match a perceived uplift in demand over the coming weeks and months.
At present the amount recoverable for furloughed employees remains at the 80% rate consistent with the scheme that has operated to date (see below for a summary of upcoming changes), however employers will be obliged to pay employees their full salary and associated costs (such as employers NI and pension) for the days worked.
A summary of the changes from 1 July are as follows:
- Employees eligible for flexible furlough must have been furloughed for at least one three-week period prior to 30 June.
- Claims up to and including 30 June (under the existing scheme) must be made by 31 July.
- The minimum claim period reduces from 21 days to 7 days.
- Claims need to begin and end in the same month (e.g. you couldn’t do a 7-day claim for 30 July to 5 August – you’d have to do separate claims for 30 – 31 July and 1 – 5 August) – claims of under 7 days are permissible where the 7 days straddles a month end.
- Claims can only cover ‘usual hours’ not worked and will need to include a record of a) usual working hours in the claim period, b) the hours worked and c) the hours furloughed.
- Those that employers wish to consider for flexible furlough should be provided with updated furlough agreements reflecting the terms of this (we can provide template documents if required) – there is no need to change the agreement or claim process for those not opted for flexible furlough.
Given the variable nature of employees’ working hours and arrangements there is no specific methodology for calculating claims to the extent that we could cover them in this note, and we do appreciate the changes have potential to introduce greater complexity to a process that has (at least to some extent!) been relatively straightforward to date.
If you are unsure and would like our support please do get in touch. Additionally the government has updated its guidance on calculating claims to cover a range of scenarios and is a good reference point: https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme
A summary of the upcoming changes to the Job Retention Scheme is as follows:
1 July: ‘Flexible Furlough’ commences
1 August: Employers liable to pay Employers’ NI and Pension costs on wages of furloughed staff
1 September: Government furlough contribution drops to 70% (employer to make up 10%)
1 October: Government furlough contribution drops to 60% (employer to make up 20%)
31 October: Job Retention Scheme ceases
If you have any questions regarding this or anything else please get in touch, and for regular updates, announcements and news please check our website (www.dsaprospect.co.uk) and make sure you’re following our LinkedIn page: https://www.linkedin.com/company/dsa-prospect-ltd