As the media has covered extensively in recent weeks, the furlough scheme is changing to enable workers to go back to work on a part-time basis if full-time work is not quite achievable, from 1 July 2020.
On the face of it the flexible furlough scheme appears to provide businesses with the opportunity to bring back furloughed staff in line with the amount of trade and therefore work that is available. In other words, if things are only picking up slowly then staff can come back for as little as a few hours per week; they can also remain fully furloughed if that’s what the business requires.
How will it work?
If an employer is taking back a worker under the flexible scheme, an agreement with or from the employee will need to be made, agreeing to the hours and days that they will be expected to work from 1 July onwards.
The employer will have to pay normal wages for the hours that are worked and is then able to claim up to 80% (capped at £2,500) for the hours that are not worked.
How flexible will it really be?
Unfortunately, the scheme does not provide as much flexibility as it seems.
- Only employees who had been furloughed at least once for the minimum 3 week period at any point between 1 March and 30 June are eligible to be claimed for (unless they have been on maternity or paternity leave and therefore haven’t been furloughed before, then they can be furloughed for the first time in July);
- An employer cannot exceed the number of employees that were on furlough leave when making flexible furlough claims – so if a company only ever had 5 staff members on furlough during each 3 week period (many businesses did this to rotate people on furlough), then only 5 employees can be on flexible furlough in each period; and
- While the three-week minimum period will be replaced with 1 week, businesses will now have to be more careful when submitting claims – only one claim per claim period is allowed and a claim cannot overlap two different months. There can also be no gaps between subsequent claims.
Planning is crucial
If you are looking at implementing flexible furlough, there is no doubt that it will require quite a bit of planning from each business as well as working out a way to keep records of hours that are actually worked (if they differ from what is agreed in a new flexible furlough agreement which is required for each furloughed employee). It is easy to miss something and be left out of pocket which of course would impact on cashflow which could have a negative impact on your business in these already difficult times.
Keep up to date on changes that are coming
The money granted by the government is gradually reducing – from August employers will be required to start paying national insurance and pension contributions for all furloughed staff; in September the grant amount is reduced to 70% salary and in October this falls to 60% (the cap reducing accordingly to £2,187.50 and then £1,875.
Get in touch
If you are unsure about how the new flexible furlough scheme will work and want to ensure you have everything in place in readiness for the upcoming changes, get in touch with us!