Q&A – New Flexible Furlough Scheme

On Friday (29 May), chancellor Rishi Sunak announced his plans to wind down the furlough scheme by October. This included detail on the creation of new flexibilities allowing employees to work part time while still being eligible for furlough grants, and the introduction of employer contributions.  

We await further detail on the scheme on 12th June but in the meantime, we have created some Q&A’s to help employers plan. 

Q: When do employees have to be registered to join the Flexible Furlough Scheme? 

A: Employees need to have either already been furloughed previously or be on current furlough leave by 10th June 2020.  This is because the current scheme ends on 30th June to new entrants. 

Subject to further guidance, the staff member does not have to actually be on furlough as at 30 June, for example some employers have been bringing staff back for a few days at the end of the month to deal with administrative tasks and then furloughing them again. These employees could be applied for under the extended scheme. 

Q: By when do I have to make a claim for the existing original Furlough Scheme? 

A: The employers’ time limit to make any claims in respect of the period to 30 June, is 31 July. Further government guidance on the extended furlough scheme is expected on 12 June – this is after the 10 June cut off point for furloughing employees who have not previously been furloughed. 

Q: Does the newly extended furlough scheme mean that employees who started a new job after 19 March can now be furloughed? 

A: Unfortunately no – there must have been an RTI submission notifying payment in respect of that employee to HMRC on or before 19 March 2020.  

Q: If an employee has already been taken off furlough before 10 June, can that employee be re-furloughed again after 10 June under the flexible furlough scheme? 

A: Yes if an employee has already been taken off furlough before 10 June but has undertaken a full three week furlough period before then, that employee can be re-furloughed again after 10 June under the extended scheme. 

Q: What amount can be claimed for an employee on flexible furlough? 

A: The claim must be proportional to the hours not worked. Employers must report hours worked and the usual hours an employee would be expected to work in a claim period. 

For example, an employer and employee may agree that an employee, previously on furlough, returns to work half time, meaning they now work for 20 hours compared to a 40-hour working week before the pandemic. For the hours the employee is not working they will be covered by furlough pay, and for the hours worked will be paid salary as normal. If the employee normally earns £3,000 a month, they would have got full furlough pay of £2,400 a month. On returning to work half time the employee would earn £1,500 a month from the employer (as the proportion of normal monthly salary) plus £1200 for the 20 weekly hours of furlough (half the monthly furlough pay). This means the employee would get a total of £2,700 a month for working half time compared to £300 less if they were on full furlough. 

Q: What will employers have to pay under the new scheme? 

A: August: 80% of wages up to a cap of £2,500 but employers will pay employer NI and pension contributions for the hours the employee does not work. 

September: 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay employer NI and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. 

October: 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will also pay employer NI and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. 

Q: Do employees need to sign a new agreement to be furloughed under the Flexible Furlough Scheme? 

A: Yes – because payment terms will be different and Terms and Conditions of employment will also be affected with differing working hours. 

Q: Can we continue to rotate employees on and off furlough under the new scheme? 

A: We await guidance on this on 12th June and will update our Q&A’s then. 

Q: If the Scheme is going to change month on month how doe this affect my ability to make a furlough claim for employees? 

A: You will need to make a monthly claim – this is more frequent than the current Furlough Pay Scheme. 

Q: It sounds complicated from September – how should I manage my workforce that are part furloughed part working? 

A: Carefully – take time in advance to plan out how many people you will need and when.  You will need to run a Payroll and make a Furlough Claim – these amounts will need to be accurate so build in time for calculations. 

Q: What happens if I need to make employees redundant whilst on furlough? 

A: Whilst employees can’t work whilst on furlough, you can complete redundancy consultations. 

Q: How does annual leave work under the new Flexible Furlough Scheme? 

A: We await guidance on this on 12th June. 

Q: How can I make my employees feel safe coming back into work? 

A: There are 2 sides to this question – physical health and mental health – both extremely important.  Following latest government guidelines to include PPE if required, staggering shifts, social distancing but also remembering that employees may be anxious/ stressed and understanding and accommodating this.  https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19 

Q: I have an employee that is currently on Maternity Leave and will return after 10th June – can she still be furloughed? 

A: No, unfortunately the Government have advised that there will be cases where people can’t be covered by furlough and this is an example. 

Q: Can I receive Paternity and Furlough Pay? 

A: No, it needs to be 1 or the other.  

Q: What happens when people have irregular working patterns with the Flexible Furlough? 

A: In the case of Zero Hours contracts we hope to have more detail on 12th June. 

At Agile HR Consulting Ltd we are keeping close to the news so we can help you interpret the new Furlough Arrangements for your business.  Drop us a line jenny@agilehrconsulting.com/ 07990 537522 and follow our weekly updated blogs www.agilehrconsulting.com.

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