Flexible Furlough Scheme

Major changes to the existing scheme with effect from 1st July 2020 are as follows:

  • There will no longer be a minimum three-week period for furlough. Whilst there will not be a required minimum period to furlough employees, any claim made to the CJRS portal must be in respect of a minimum one week period regardless of how many days may have been worked in this one week period;

  • You can no longer add claims to the portal that cover more than one payroll period. All claims through the portal must start and end within the same calendar month.

  • You cannot furlough a greater number of employees than have been furloughed previously - subject to the provisions of those returning from parental leave.

The key principles of Flexible Furlough Scheme are clear. From 1st July 2020, you can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim a CJRS grant for the hours not worked.

Claim periods starting on or after 1st July 2020 must start and end within the same calendar month and must last at least 7 days. Salary caps are proportional to the hours an employee is furloughed. For example, in July an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.

To claim under the new Flexible Furlough Scheme you must work out 3 things - the Length of the Claim Period, What Is Included and the Employee's Usual Hours and the Employees Usual Hours and Furloughed Hours

Length of the claim period - claims for any periods starting before 1st July must end on or before 30th June (even where an employee furloughed in June continues to be furloughed full time in July.)

Separate claims will need to be submitted to cover the days in June and the days in July, even if employees are furloughed continuously. This may mean that your claim periods will differ from the pay periods you use.

Claim periods starting on or after 1st July must start and end within the same calendar month and must last at least 7 day. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.

You can only make one claim for any period so this must include all furloughed or flexibly furloughed employees in one claim even if they are paid at different times. If more than one claim is made the subsequent claim cannot overlap with any other claim that you make. Where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps in between the dates.

The Guidance recommends that where possible, Employers should match their claim period to the dates they process payroll. Claims can be made before, during or after payroll is processed and there is no requirement to wait until the end of a claim period to make the next claim.

From 1st July each claim period must start and end within the same calendar month. Claims for periods ending on or before 30 June 2020 must be made by 31 July 2020.

What you can include when calculating wages - this remains unchanged for the time being.

The employees’ usual hours and furloughed hours - when claiming for employees who are flexibly furloughed, you must be certain of the exact number of hours they will have worked during the claim period. If a claim is made in advance and the employee works for more hours than advised, then will have to reimburse some of the grant to HMRC.

If an employee is fully furloughed, there is no requirement to work out their usual and furloughed hours you should instead work out the maximum salary amount.

Where an employee is flexibly furloughed, you must work out the employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period.

Normal working hours for those with fixed hours/pay will be calculated by the number of hours worked in the pay period before 19th March 2020. For those with variable hours this will be the higher of either the average number of hours worked in the tax year 2019-2020 or for the hours worked in the corresponding calendar period in 2019-2020.

There are two different calculations you can use to work out your employee’s usual hours, depending on whether they work fixed or variable hours. The calculation for variable hours will be applicable where the employee is not contracted to a fixed number of hours or their pay depends on the number of hours they work.

If neither of these apply, then the calculation will be for an employee who is contracted for a fixed number of hours.

These calculations are set out in full in the Guidance https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme

Sam Brown