On 12th June 2020, official guidance for employers utilising the Coronavirus Job Retention Scheme (CJRS) was updated and now includes details relating to the newly announced Flexible Furlough Scheme (FFS). Unfortunately, many updates were made via amendments to existing guidance documents and caused lots of confusion throughout the industry.
What Is the Flexible Furlough Scheme?
The new scheme gives employers the flexibility to bring their furloughed employees back to work part-time from 1st July, as part of the government’s plan to re-open the UK and kick-start the economy.
Flexibility can be decided in varying hours or shift patterns and will contributions will gradually decrease, with the first major change being in 1st with the removal of Employer’s National Insurance and Employer’s Minimum Pension Contributions being the first to go. See ‘How does the scheme work?’ for more detail.
The 3-week furlough rule has also been removed, with a minimum of 1 week (7 days) now only needed to make a claim and can be split across different days during the same month.
Click here for information on calculating flexible furlough pay.
How does the scheme work?
For those employees returning to work part-time, employers will need to pay 100% of their normal wage for hours worked and should continue to pay the remaining furloughed hours at the 80% rate (see How to calculate flexible furlough pay for details).
The government’s contribution towards the wages of employees will also gradually decrease until it comes to an end on 31st October 2020.
- From 1st July – No further employer contribution will be requested for the time being – Remaining at 80% throughout this period.
- From 1st August – Employer’s will expected to pay Employer National Insurance (currently 13.08%) and Employer Pension Contributions only (3% minimum).
- From 1st September – Employers will be expected to pay an additional 10% towards employers furloughed wages, with the taxpayer contributing the remaining 70%.
- From 1st October (the scheme’s last month) – Employers will be expected to pay an additional 20% towards employers furloughed wages, with the taxpayer contributing the remaining 60%.
Holiday pay now also needs to be paid at 100% and cannot be part-claimed through the scheme.
Who is eligible for the scheme?
Only employees who have already been furloughed before 1st July 2020 and for a minimum of 3 weeks will be eligible for the scheme. This is with exception of employees who have recently returned from statutory leave (such as maternity/paternity/adoption) or armed forces duty.
HMRC has also confirmed that a new Flexible Furlough Agreement must be in place and has strict requirements that they should be kept on record for 6 years.