Changes to the Coronavirus Job Retention Scheme (Furlough).
From 1st July you will:
– only be able to claim for employees who have previously been furloughed for at least 3 consecutive weeks between 1 March and 30 June 2020.
– be able to flexibly furlough employees – this means you can bring your employees back to work for any amount of time, and any work pattern
– still be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.
If you flexibly furlough employees, you’ll need to agree this with the employee and keep a new written agreement that confirms the new furlough arrangement. You’ll need to:
– make sure that the agreement is consistent with employment, equality and discrimination laws
– keep a written record of the agreement for 5 years
– keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working).
You do not need to place all your employees on furlough and you can continue to fully furlough employees if you wish.
Employees cannot undertake any work for you during time that you record them as being on furlough.
From 1 July, agreed flexible furlough agreements can last any amount of time (they don’t have to be a minimum 3 weeks like before). Employees can enter into a flexible furlough agreement more than once.
If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period.
The ‘usual hours’ for an employee who works variable hours will be calculated based on the higher of either:
– the average number of hours worked in the tax year 2019/20
– the corresponding calendar period in the tax year 2019/20
When you calculate the usual hours, you should include:
– any hours of leave for which the employee was paid their full contracted rate (such as annual leave)
– any hours worked as ‘overtime’, but only if the pay for those hours was not discretionary
Whilst furloughed, employees are still able to take part in training,volunteer for another employer or organisation or
work for another employer (if contractually allowed).
From 1 August employers will not be able to claim for employer NICs and pension contributions.
Employees still have the same rights at work, including:
– Statutory Sick Pay
– annual leave
– maternity and other parental rights
– rights against unfair dismissal
– redundancy payments
Furloughed employees continue to accrue leave as per their employment contract.
Employees can take holiday whilst on furlough. If an employee is flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.
Employers will be obliged to pay employees who are on holiday additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need and the correct notice is given.
When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period.
From 1 July, the scheme rules will change each month. This means that claim periods starting on or after 1 July must start and end within the same calendar month. If your pay period includes days in more than one month, you’ll need to submit separate claims covering the days that fall into each month.
At least minimum wage rates must be paid for all hours worked. Furloughed workers who are not working can be paid the lower of 80% of their wages or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage.
For employees on fixed pay, claims for full or part-time employees furloughed on return from family-related statutory leave should be calculated against their salary, before tax, not the pay they received whilst on family-related statutory leave (i.e maternity). The same principles apply where the employee is returning from a period of unpaid statutory family-related leave.
Claims for those on variable pay, returning from statutory leave should be calculated using the higher of either:
– 80% of the same month’s wages from the previous year (up to a maximum of £2,500 a month)
– 80% of the average monthly wages for the tax year 2019 to 2020 (up to a maximum of £2,500 a month)