What is flexible furlough?

Last week (29 May), Chancellor of the Exchequer Rishi Sunak said the Coronavirus Job Retention Scheme (CJRS) in its current guise will close to new entrants at the end of this month (30 June).

He revealed the contributions for furlough would start in August​ with employers being asked to pay national insurance and pension contributions.

In September, they will pay 10% of furloughed employees’ wages while taxpayers will make up 70% and, in October, employers will contribute 20% and taxpayers 60%.

He went on to outline the introduction of the new flexible furlough scheme that will replace the current initiative from next month (1 July).

Sunak also stated employers wanting to place new employees on the scheme will need to do so by 10 June to allow them time to complete the minimum furlough period (three weeks) by the closure of the scheme.

He added: “The biggest request I’ve heard from businesses, large and small, right across our country, is to have the flexibility to decide what is right for them.

“So, to protect jobs and help businesses decide how quickly to bring their workforce back, we are introducing a new, more flexible furlough. This is a critical part of our plan to kick start the economy. The financial security of the furlough scheme has been a relief for many but, at the same time, people want to work.

“No one wants to be at home, on furlough. No one wants to feel unable to contribute so HMRC and the Treasury have worked hard to put the flexible furlough in place, not from 1 August as planned, but from 1 July – one month early.”

Maximum flexibility

He added: “From 1 July, employers will have the maximum possible flexibility to decide the right arrangements for them, and their furloughed staff.

“For instance, your employer could bring you back to work for two days a week. Your employer would pay you for those two days, as normal, while the furlough scheme would continue to cover you for the other three working days.”

There are now more details about the flexible furlough scheme.

From next month (1 July), pubs can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked.

Employers will also be able to agree any working arrangements with previously furloughed staff from 1 July.

When claiming the grant for furloughed hours, employers will need to report and claim for a minimum period of a week.

Those making claims for longer periods than a week such as a monthly or two-weekly cycles will be able to do so.

In order to be eligible for the grant, employers must agree with staff any new flexible furloughing arrangement and confirm that in writing.

Employers can claim the grant for hours employees are not working, calculated by reference to their usual hours and worked in a claim period.

Furlough details

Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.

For worked hours, pubs will pay staff subject to their employment contract and employers will be responsible for paying the tax and national insurance contributions on those amounts.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.

From 30 June, employers will only be able to furlough employees they have furloughed for a full three-week period prior to this date, meaning the final date employers can furlough staff for the first time will be the 10 June.

Employers will have until 31 July to make any claims in respect of the period to 30 June.

From 1 July, the scheme will only be available to employers that have previously used the scheme in respect of employees they have previously furloughed.

Also, from then, claim periods will no longer be able to overlap months, which the Government said is necessary to reflect the forthcoming changes to the scheme.

The number of employees an employer can claim for in any period cannot exceed the maximum number they have claimed for under any previous claim under the current scheme.

Employers can continue to make claims in anticipation of an imminent payroll run, at the point payroll is run or after it has been run.

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