FURLOUGH Changes Ahead
This is a reminder that you can start to flexibly furlough eligible employees from 1 July onwards.
From 1 July, you can claim a more flexible grant for any employee you have previously received a CJRS grant for, and who now returns to work on reduced hours. You can also continue to claim for employees who stay fully furloughed.
What you need to do next
AUGUST 2020 : Employer will still be able to claim the lower of 80% of staff wages or £2,500 a month BUT from 1 August employers will pay for their own pension contributions and National Insurance contributions ( the employer share).
SEPTEMBER 2020: reducing the furlough to the lower of 70% or £2,187.50 a month in September
OCTOBER 2020: further reducing the furlough to the lower of 60% or £1,875 in October, with the scheme closing on 31st October.
1. Eligibility for flexible furlough
From 1 July 2020 only employees that have been furloughed previously can be furloughed from 1 July 2020 onward.
2. Procedure for flexible furlough
The employer should discuss with employees ; specifying which hours they will be expected to work.
The agreement should be confirmed in writing and retained for five years.
3. Records Keeping
Employers have to keep records of the number of hours their employees work and the number of hours that they are furloughed during flexible furlough. We suggest you keep a weekly/ monthly record sheet/ spread sheet.
4. Maximum period of flexible furlough
The period that employers claim for must be for a minimum period of seven calendar days and there is no maximum other than the £2,500 cap. The agreement can be varied to agree a revised split.
The furlough scheme will allow employers to recover the remainder of pay to a maximum cap. Wage caps are proportional to the hours an employee is furloughed. So for example, an employee is entitled to 40% of the £2,500 cap if they are placed on furlough for 40% of their usual hours. Hence, the employer can recover a maximum of £1,000 (£2,500x 40% ).
The amount that the scheme will cover will be reduced from September 2020 as described above.
6. Calculating working hours
There are two different method that can be used to work out the employees’ usual hours, depending on whether they work fixed or variable hours.
FIXED hours : Where the employee’s working hours are fixed the reference period for calculating their hours is the hours they were contracted to work at the end of the last pay period ending on or before 19 March 2020. This is before the Covid-19 furlough announcement was made.
VARIABLE hours : Where an employee works variable hours then we will use the higher of:
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