The Government has introduced important changes and further guidance to the Coronavirus Job Retention Scheme (Furlough) from July 2020
With effect from the 1st July 2020, employers will be able to use flexible furlough, allowing employees to work part time whilst being furloughed for the rest of their normal working time. The aim being to allow a gradual return to work as needed by the business, rather than the current all or nothing approach.
Where employers take advantage of the flexible furlough arrangements the furlough grant will be reduced to take into account the proportion of hours worked by the employee. Employers will pay for periods when the employee is working, and claim the 80% grant for the remaining portion of the employee’s normal hours. Normal hours are based upon the employees’ normal contracted hours or, where hours are variable, either the average hours worked in the 2019/20 tax year or the hours worked in the equivalent period last year, if higher. Subject to some exceptions for employees returning from statutory leave, such as maternity leave, flexible furlough is only available for employees who have been previously furloughed and a claim cannot include more employees than have been included in any earlier claim.
Flexible furlough is the first in a series of adjustments to the furlough scheme.
From the 1st August 2020 employers will be expected to meet employer’s pension and national insurance contributions, from 1st September, the amount of grant will reduce to 70% with employers expected to contribute the additional 10% and from October, this will further reduce to 60%. The scheme is not expected to continue beyond the end of October.
With the introduction of flexible furlough and the upcoming increase in costs associated with the scheme businesses may now be focusing on bringing staff back to work, and any adjustments to working hours, locations and arrangements that this may require. Businesses may also inevitably be looking at the difficult question of redundancies, something which furlough may have allowed them to avoid so far.
For assistance with employment issues, including reorganisation, changing contractual terms or redundancy, contact Lawspeed on 01273 236 236