Flexible Furlough – your questions answered

We’ve put together a series of the most commonly questions from our clients to help guide you through the latest legislation regarding the furlough scheme.
 
What is the difference between the no minimum furlough period and the 7 day claim period?
 
From 1 July 2020, there is no minimum furlough period for employees (assuming that the employee meets the criteria for flexible furlough). This means that an employee can be furloughed for a few hours only if necessary for the business.
 
The claim period is the period for which you enter a claim and this DOES have a minimum requirement of 7 days, which means that the shortest period for which you can make a claim is a week. There are other requirements for making claims from 1 July 2020 too:
 
  • You can’t overlap months – if you align your claims with your payroll and this overlaps a month end then you will need to make 2 separate claims. For example, a claim period covering 23rd June to 21st July will need to be claimed as the period up to 30th June and a separate claim for the period from 1 July
  • According to current guidance, the deadline for making a claim is the end of the following month, so all claims for July need to be made by the end of August
  • You can only make one claim for your employees per claim period. This means care will need to be taken when making separate claims for weekly and monthly payrolls.
 
If I have decided that my business needs to make an employee redundant, can I claim under the furlough scheme for the redundancy pay?
 
There are different elements to the pay an employee receives as part of a redundancy process.
 
The payment of their notice period can be included in a furlough claim at the appropriate rates, as long as the employee is employed during the notice period but has been furloughed.
 
If any holiday is taken as part of the notice period, this must be paid to the employee at 100% of pay and can also be included in the furlough claim.
 
If the employee receives a payment in lieu of notice (PILON) and employment terminates immediately, then the PILON cannot be included in the furlough claim as the employee is no longer on furlough.
 
Any redundancy payment made is not able to be claimed under the furlough scheme.
 
Is the furlough scheme being extended beyond October 2020?
 
No. As far as we know currently, the furlough scheme will end on 31 October 2020 meaning that from 1 November 2020 no claims can be made to cover employees’ wages.
 
However, in the Summer Statement on 8 July 2020, the Chancellor announced that businesses will be able to claim a one off payment of £1,000 for every previously furloughed employee that is retained at the end of January 2021, as long as they earned over £520 per month. More details are due to be announced by the end of July 2020.
 
Can I insist an employee takes holiday while they are furloughed?
 
The government has introduced legislation to say that employees can now carry over up to 4 weeks of unused annual leave into the next 2 leave years. This has been designed to ease the requirements on businesses to ensure that their workers take all their statutory periods s of annual leave each year.
 
You can require employees to take a proportion of their annual leave during their furlough period.
However, if you are going to ask them to take annual leave at a specific time you will now need to give them double the amount of notice for the annual leave being taken. For example, if you are asking someone to have a week’s annual leave, you need to give them 2 weeks’ notice.
 
Can I make a claim under the furlough scheme if the employee is on annual leave?
 
Yes. You will need to ensure that the employee is paid 100% for the annual leave they have taken,  but you will be able to claim 80% back under the JRS for July and August, with amounts reducing as per the revised guidelines in September and October.
 
If we are using the flexible furlough scheme from 1 July 2020, do we need to get a revised agreement from the employee?
 
Yes. Each time the working hours for your employee changes, you will need to get the employee’s agreement to the changes. An email with a response from the employee should be fine.
Got a question?
Speak to Sarah Healey Pearce or another member of our Covid-19 Business Support team by calling 0300 058 6559
Email Sarah