Q&A: flexible furlough scheme running between 1 July – 31 October - in depth - Gateley
In depth

Q&A: flexible furlough scheme running between 1 July – 31 October

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Further details of how flexible furloughing will work were announced on Friday 12 June 2020. This is the next and apparently last stage of the Coronavirus Job Retention Scheme that has enabled employers to claim grants of over £19.6 billion* towards wages for furloughed employees (*as at 7 June 2020).

The most recent published guidance covers the period up to the end of October 2020.

In this document we answer some of the key questions relating to the changes in the Job Retention Scheme.

Access our existing Q&A for previous guidance.

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Your Questions Answered

  1. The Chancellor said there was a cut-off point on 30 June 2020, what does this mean?

    The revised scheme from 1 July will be available in respect of all employees who have completed at least one complete 3-week furlough period between 1 March and 30 June.

    This means 10 June was the last day an employee could begin a furlough period for the first time to qualify for the scheme from 1 July.

    An important exception to this is that anyone returning from a period of maternity leave or similar family related leave which started before 10 June will be able to be furloughed even if they have not been furloughed before.  This also applies to armed forces reservists
     

  2. Can an employee refuse to consent to an extension of furlough or to flexible furlough?

    Yes, furlough needs to be agreed. You will need to check the scope of the current agreement to furlough and make sure that any necessary variations are agreed to cover whatever flexible working arrangements you may wish to implement between 1 July and 31 October.   A written record will need to be kept as with the existing scheme.

    Your other options will depend on business circumstances but it may be that the refusal will lead to a redundancy process and termination of employment.
     

  3. What is the minimum length of the furlough period?

    Prior to 1 July the minimum furlough period had to be at least 3 weeks. Furloughs that start on or after 1 July maybe for any period of time. 

    If anyone previously furloughed starts a new furlough period after 10 June and before 1 July, that will have to be for a minimum 3-week period and no work can be undertaken (even from 1 July) in order to qualify for the grant during that 3 week period.
     

  4. What contribution will we need to make when the scheme changes in July?

    The key point is that under the scheme the employee needs to continue to receive as a minimum 80% of their regular wages, capped at £2,500 per month (and if you have agreed a top up that would continue to apply unless you agreed something different).

    The required employer contributions will be as follows:

    - July: no change
    - 1 August: employer national insurance and pension contributions
    - 1 September: 10% of employee wages (up to £312.50) plus employer national insurance and pension contributions
    - 1 October: 20% of employee wages (up to £625) plus employer national insurance and pension contribution

    The Government will taper down its contribution to 70% in September and 60% in October.
     

  5. When can furloughed employees start doing some work under the new flexible furlough arrangement? 

    Subject to the point made at question 3 above, from 1 July furloughed employees can work on a flexible basis (with consent), which means that they can do some work for you whilst you still claim the government grant for the hours that they are not working. 

    This is a month earlier than was expected.  
     

  6. Must all furloughed employees do some work for us to continue to claim the grant? 

    No, flexible furloughing is an option for you but if you are not in a position to provide any work then you don’t need to do so. Employees can continue on full furlough subject to an increased contribution from you from August onwards as set out above. 
     

  7. Is there a minimum or maximum number of working hours for employees on flexible furlough?

    No, you can agree any working arrangement with an employee on flexible furlough. It appears that this could change from week to week – because, when claiming the grant for furloughed hours, employers will be able to report and claim for a period of just one calendar week at a time (the previous requirement to claim in minimum periods of 3 weeks is no longer applicable from 1 July). 
     

  8. If we currently rotate employees on furlough could we instead put them all on part-time furlough?

    It will not be possible to claim for more employees than you have previously in one claim period. 

    So if half your employees currently carry out work and you claim for the other half on a rotation basis you could not from July reduce hours to 50% and furlough them all if the new claim would exceed the number of employees you had claimed for previously in any one period.  

    By way of example if you have previously made claims for say 20, 30 and 50 employees, but in total there have been 70 employees furloughed altogether, from July 50 would be the maximum number of employees you could claim for in any claim period.
     

  9. What do we pay an employee on flexible furlough for the hours they are working?

    For worked hours, you will need to pay whatever is due under the employee’s contract, and you’ll be responsible for all tax and NICs due on those amounts.  
     

  10. Can we agree a pay cut for the hours worked?

    There is nothing to prevent this in the guidance. National Minimum wage legislation will have to be adhered to for all hours worked. 

    It would appear possible, therefore, to agree a reduced salary/hourly rate for the time working, whilst the time furloughed will be based on the pre- scheme rate in line with the formula set out in the scheme for working out furlough pay. 
     

  11. What can we claim for an employee on flexible furlough through the scheme?

    You will be able to claim the grant for the hours your employees are not working calculated by reference to their “usual hours” worked in a claim period. The cap will be proportional to the hours not worked. You will need to report hours worked and the usual hours an employee would be expected to work in a claim period.

    The guidance has numerous examples of how to work out the usual hours.  The intention is to establish the usual hours worked in the claim period.  The employer will then track actual hours worked in that period.  This number is the subtracted from the usual hours number to establish the number of hours to be claimed for as furlough pay under the grant.  
     

  12. When can we claim the grant?

    The last day to claim for June furlough will be 31 July.

    Claims for the period from 1 July onwards can be submitted from 1 July.  

This article was originally published on 4 June 2020, it was last updated on 22 June 2020.

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