Furlough Scheme Updates
Liz Beck founder of Aspiring HR, updates on changes coming to the Furlough scheme and how this can potentially impact you and your employees.
In early June we heard news from the Chancellor about changes coming to the Furlough scheme. The headlines of which are detailed here:
- There will be no changes to the scheme for June or July.
- From the 1st August: employers will be required to pay national insurance contributions and pension contributions for employees but can no longer reclaim those costs through the CJRS.
- From 1st September: the Government will reimburse 70% of salary (up to a maximum of £2,190). Employers will be required to top-up to 80% (or more if no other contract variation was agreed with the employee).
- From 1st October: the Government will reimburse 60% of salary (up to a maximum of £1,875), and employers will continue to be required to top up to 80% (or more if no other contract variation was agreed with the employee).
- The scheme will close on 31 October 2020.
Flexibility Plans from 1st July 2020:
- From the 1st July: a process for ‘flexible furlough’ will be introduced. This will mean employees can work part-time and also be furloughed part-time, enabling a gradual adjustment to ‘return’.
- The scheme will close to new entrants on 30th June 2020 which will mean employers wanting to place ‘new’ employees on the scheme will need to do this by 10th June to meet the current scheme rules for the minimum period of 3 weeks.
- 10th June was the last day employers were able to furlough employees and qualify for the scheme funding. This may require consideration for future demand and flexible resourcing models to be forecast.
Guidance for the Flexible Furlough is as follows:
You can decide the hours and shift patterns that your employees will work on their return and you will be responsible for paying their wages in full while working.
This means that employees can work as much or as little as your business needs.
With no minimum time that you can furlough staff for.
Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing.
When claiming the CJRS grant for furloughed hours, you will need to report and claim for a minimum period of a week.
You can choose to make claims for longer periods such as on monthly or two weekly cycles if you prefer.
You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.
Reminder of Important dates
The scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June.
The final date that you could furlough an employee for the first time was 10 June for the current three-week furlough period to be completed by 30 June.
Employers will have until 31 July to make any claims in respect of the period to 30 June.