Furlough has quickly become the new word everyone is talking about; however, the Government has now published guidance on the next stage of furlough – Flexible Furlough.
Currently, when an employee is furloughed, this means that they are unable to work at all for the company in which they had been furloughed from and any furlough period has to be for a minimum of three weeks. However, as restrictions are slowly lifting throughout the country, so are the requirements of furlough under the Coronavirus Job Retention Scheme (CJRS). Under flexible furlough, employees can now work for some of the week for the company from which they have been furloughed. The proportion of working days to furloughed days can be agreed between the employer and the employee.
There are however criteria which must be satisfied in order to be able to take advantage of flexible furlough, in that employees must have had at least 3 weeks of furlough prior to the 30th June 2020. This means that the latest that employees can be put on furlough is the 10th June 2020. Employees who are placed on flexible furlough must receive full pay for the hours which they actually work during that period.
Another key change to the CJRS is that the minimum period of furlough, which is currently set at 3 weeks, is to be lifted as of the 1st July 2020.
National Insurance Contributions
Throughout the furlough to date and up to and including the 31st July 2020, employers have been able to claim the national insurance contributions on the amount of furlough which is claimed under the CJRS, however from the 1st August 2020, employers will no longer be able to claim for these contributions from the government and employers will have to bear these costs.
Pension Contributions
Currently, where an employee has been furloughed, an employer is also able to claim auto-enrolment pension contributions under the CJRS, however this is set to change. Throughout July 2020, employers will be able to claim auto enrolment pension contributions for the period in which employees are furloughed, however from August 2020, again, employers will have to bear the costs of this themselves.
Going forward
It is recommended that employers keep records pertaining to any employees who have been placed on Furlough. This includes: the amount which has been claimed for each employee; their claim reference number; the calculations of any figures which have been claimed; usual working hours; and the actual hours which have been worked by employees who have been placed on flexible furlough.
Further information on the changes to the CJRS and examples of how employee wages should be caluclated can be found through the following Government guidance:
- Check if you can claim for your employees’ wages through the CJRS
- Example of how employers can calculate the amount they should claim for an employee who is flexibly furloughed
- Examples to help employers calculate their employees’ wages
O’Donnell Solicitors advise on all aspects of your Employment Law needs. For further advice at this time on what the current changes mean for you and your business, contact Suzzanne Gardener on suzzanne@odonnellsolicitors.co.uk or on 01457 761 320.
