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Late on Friday evening, the government released a series of documents giving further guidance on the flexible furlough scheme. Here is a summary of the main changes to answer key questions you may have.
Flexible furlough
As lockdown restrictions have started to ease, the government has introduced more flexibility to the furlough scheme to help businesses increase capacity once more. You now have the option to bring furloughed employees back to work for an amount of time or work pattern to support your business – but you’ll need to agree this in a new written agreement with your employees and your records and calculations must be kept for at least 5 years.
Who can be furloughed?
The furlough scheme closed to new members on 10 June, so as long as your employee was furloughed, for a minimum of 3 weeks at any time before 30 June they are able to be put onto the flexible furlough system. An important thing to bear in mind is that you cannot put more employees on to the scheme than your maximum claim up to the 30 June. So for example, if your business made three furlough claims between 1 April and 30 June claiming for 50 people in April, 40 in May, and 20 employees in June, the maximum number of employees you can furlough under the flexible furlough scheme from 1 July 2020 is 50 and each person must have been furloughed for 3 weeks before 30 June 2020.
How do I calculate my claim?
As an employer you’ll pay the normal rate of pay for the hours worked by your staff once they are back in part time work. For the time these employees are not working, they can be furloughed, and you can claim a grant to cover these hours unworked hours via the new flexible furlough portal.
- June & July: will continue in the same way, the government continues to pay 80% of the wage bill for furloughed workers, (up to £2,500) as well as the Employers National Insurance (NI) and employers pension contributions. Note: from July, the new flexible furlough scheme will mean you will have to pay your employees for the hours they work.
- August: employers start to share the cost of the scheme by being unable to claim back the Employers National Insurance and pension costs which amounts to an average of 5% of the gross employment costs of these employees. The government continues to reimburse 80% of the wages of furloughed employees which must be paid to them
- September: employers now need to pay 10% of furloughed workers’ wages, (plus NI and pension costs). The government will pay the remaining 70% up to a cap of £2187.50 per month. The employee must still receive 80% of their pay when furloughed.
- October: the government’s contribution will taper to 60% of the wages for those being furloughed up to a cap of £1,875. Employers therefore need to pay 20% of their furlough salaries (plus NI and pension costs), to bring the wages for those workers up to 80% of their usual pay. The chancellor has said this represents 23% of the gross employment costs for an employer, had that employee not been furloughed.
The caps mentioned above are prorated for the number of days an employee is furloughed in a claim period.
Frequently Asked Questions
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