WFM UK: Flexible Furloughing and Employer Contributions

Flexible Furloughing

On Friday 29^th May 2020, the UK Government announced changes to the furlough scheme which will allow employers to bring back employees on a part time basis, while still allowing them to claim the difference between the part time and usual working hours via the Coronavirus Job Retention Scheme (CJRS).                                            

From 1^st July 2020, employers will have the flexibility to bring previously furloughed employees back to work part-time and the government will still pay 80% of wages for any of the normal hours they do not work, up until the end of August.  The percentage that the government will contribute will change from 1^st August.  

Employers can decide on the hours and shift patterns for employees and are responsible for paying the wages in full for the time they are working. 

There is no minimum or maximum for the ratio of amount of time worked vs amount of time furloughed.

Any working hours arrangements must be agreed with the employee and must cover at least one week.  The agreement must be confirmed in writing.

When submitting the CRJS for the period of flexible furlough, employers will be required to submit data on the usual hours an employee would be expected to work in a claim period, and the actual hours worked.

If your employee is 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.

Employer Contributions

From 1^st August 2020, the government grant provided through the CJRS will be slowly ended.

• In June and July the government will continue to pay 80% of wages (capped at £2,500) along with employers’ National Insurance (ER NIC) and minimum employers’ pension contributions
  • Employers will have to pay, in full, for the hours that employees work in July
    
    
• In August the government will continue to pay 80% of wages, capped at £2,500
  • Employers will have to pay the ER NIC and pension contributions
    
    
• In September the government will pay 70% of wages, capped at £2,187.50, for the hours the employee does not work
  • Employers will pay ER NIC, pension contributions and 10% of unworked wages to make up 80% of the total up to a cap of £2,500
    
    
• In October the government will pay 60% of wages, capped at £1,875 for the hours the employee does not work
  • Employers will pay ER NIC, pension contributions, and 20% of unworked wages to make up 80% of the total, capped at £2,500
    
    
• The cap on the furlough grant will be proportional to the hours worked

Important Dates

• The CJRS will close to new entrants on 30^th June 2020. To qualify for the scheme, employees must have been furloughed for a minimum of 3 weeks, which means that the final date that employees can start their furlough period is 10^th June
• Employers will have up to 31^st July to complete claims in respect of the period ending 30^th June
• Technical details on how to calculate flexible furlough will be made available on 12^th June 2020

Please visit Fourth Products and Covid-19 to see other knowledge articles relating to the ongoing situation.