The Coronavirus Job Retention Scheme (CJRS), launched following strict nationwide lockdowns in response to the outbreak of coronavirus, managed to help one million employers protect the jobs and livelihoods of more than eight million workers.

Now, as the Government begins phase three of its plan to reopen the UK and get the economy moving again, businesses have the ability to start bringing back furloughed employees to work part time on a flexible basis.

Starting on the 1 July, employers have been able to bring back those employees who have been furloughed as part-time staff, whilst the government will pay for the hours that they don’t work on a continuing furlough basis. This move is designed to help businesses to reopen workplaces whilst maintaining social distancing, with the aim of getting employees back to work as quickly as possible.

Employers will have to pay staff for the hours that they are working, and contribute towards wage costs on an increasing scale, up to a maximum of 20% by October, whether the employees are working or not.


Important Points To Note

  • Going forward, no new employees can be furloughed, apart from those returning from statutory parental leave.
  • As of 1 July, there is no minimum furlough period, and employees can be brought back at any time to work part time as agreed between themselves and their employer.
  • Employers are required to pay in full for the hours worked by furloughed employees but can continue to claim a furlough grant to cover the difference between the actual hours worked and an employee’s ‘usual hours’.
  • From August, employers will be required to begin contributing towards the cost of furlough payments, up to a maximum of 20% in October. The Job Retention Scheme will end on 31 October 2020.


How Will ‘Flexible Furlough’ Work?

As of 1 July, employers can begin to bring any member of staff that is currently furloughed back into the workplace, for any amount of time and any shift pattern, claiming a CJRS grant for the hours not worked by the employee.

Employers are able to choose to continue to fully furlough some or all of their employees, or rotate employees on and off of furlough, so that everyone gets a chance to work and social distancing can be maintained.

If an employee is fully furloughed, they will not be able to do any work for an employer until they are moved to flexible furlough.


Who Is Eligible To Be Furloughed Under The New Scheme?

Employees must have been furloughed for at least three weeks before 30 June under the old scheme to be eligible to be furloughed under the new one from 1 July. The only exceptions to this rule are those returning to work from statutory parental leave, such as those returning to work after maternity leave, shared parental leave, adoption, paternity or parental bereavement leave.

You cannot furlough new employees now. The final date for new furloughs was 10 June.

All other eligibility criteria are the same, but you can check the government’s ‘Check which employees you can furlough’ guidance for more information.


How Long Can Employees Be Furloughed

The last date anyone could be added to the furlough scheme was 10 June, and if you furloughed any employee on that date, they will be able to move to the new scheme straight away.

For employees re-furloughed after 10 June, you will have to wait three weeks until you can move them onto the new scheme, even if this period ends after 1 July. A previously furloughed employee who started a new furlough period as of 15 June, for example, would then remain furloughed under the old scheme until 6 July.

Once employees have all been moved to the new scheme, they can be flexibly furloughed for any period up until 31 October 2020.

Whilst businesses are not able to furlough anyone new, they are able to re-furlough staff if they are forced to close again amidst any local lockdown.

On this subject, a spokesperson for the Prime Minister has said: “If employers have used the furlough scheme at any point between March 1 and June 30, which of course many will have, they can re-furlough those employees from July 1.

“If someone worked in non-essential retail and they have been able to go back to work and that non-essential retail now has to close again they will still be eligible to benefit from the furlough scheme.

“It applies nationwide but obviously it’s a particular circumstance to Leicester and those surrounding conurbations at the moment.”


How Many Employees Can You Furlough?

From 1 July you can only furlough as many employees as the maximum number of employees you had furloughed under the old scheme, although you don’t need to include returning parents in this calculation as they are exempt.

This may cause some problems for employers already working with rotating furlough patterns. If you had 100 employees, with two groups of 50 working on a rotating furlough basis, you are only eligible to have 50 employees flexibly furloughed at any one time. This means that you still cannot bring back your entire workforce for part time hours and will need to work out a way to keep your rotation going to take part in the scheme.


How To Calculate Flexible Furlough

It may be tricky for businesses to calculate the CJRS grant for employees on flexible furlough, due to the complex nature of shift patterns, hours worked and your required contribution increasing over time.

When an employee is working under the flexible furlough scheme, they can work as many hours as necessary, agreed between employer and employee. Employers must pay the employee’s normal wages in full (this must be the pre-furlough rate of pay) each month.

Employers can then claim a pro-rated furlough grant for the hours that the employee hasn’t worked, based on an employee’s ‘usual hours’ when they are not on furlough, minus the hours they actually worked.

For each claim period and for each employee, an employer must work out and submit:

  • The employee’s usual working hours;
  • The actual hours they worked
  • Their furloughed hours.

Wages will be proportional to the hours not worked by the employee.

The government guidance document “Calculate how much you can claim”. Offers in-depth details on how to calculate the wages you need to pay and how much grant you can apply for. There is also a CJRS calculator, which has been updated to include flexible furlough calculations.


Help With Flexible Furlough

The new rules regarding furloughing can be difficult to interpret in some cases, so if you need help making sure you comply with the new rules then you can call the friendly team at An Accounting Gem

You can reach us on 01473 744 700 or by email at contactus@aag-accountants.co.ukfor a friendly discussion along with expert advice on this or any other accountancy topic.