Job Retention Scheme and Flexible Furlough New Rules

Rishi Sunak, Chancellor, announced on Friday 29th May that the current Job Retention Scheme (the Scheme) would remain unchanged until 31st July. After this point, Employers would be asked to contribute to the costs of the scheme for all furloughed employees as follows:

Up to the 31st July 2020 the Scheme will continue unchanged with the Government paying 80% of salary up to a maximum of £2,500.
From 1st August 2020 onwards, employers will be required to pay employers NI and Pension contributions. The Government will continue to pay 80% of salary up to a maximum of £2,500.
From 1st September 2020, employers will be required to pay 10% of salary, in addition to the employers NI and Pension contributions. The Government will pay 70% of salary up to a maximum of £2187.50.
From 1st October 2020, employers will be required to pay 20% of salary, in addition to the employers NI and Pension contributions. The Government will pay 60% of salary up to a maximum of£1,875.00.
The Job Retention Scheme ends on the 31st October 2020.

From the 1st July 2020, you will only be able to furlough employees that have previously been furloughed for a minimum of 3 weeks prior to the 30th June 2020.

This means any employee who has not been furloughed previously prior to the 10th June 2020 will no longer be able to be furloughed under the Job Retention Scheme. Employers will have until 31st July to make their claims up to 30th June 2020.

Yes. The Chancellor also announced that there will be a “Flexible Furlough” Scheme that will run concurrently with the Job Retention Scheme.

The Scheme allows employers to bring back employees part-time and pay them for the hours worked. The Government will then top up the wages.

Companies will need to ensure that they are able to calculate the hours worked and hours furloughed for each period (calendar month) by employee. The claim portal will be amended to allow these figures to be entered after 1st July 2020.

In order for an employer to be able to use the Scheme, an employee must have been furloughed for at least 3 weeks prior to the 30^th June 2020. This means that they must have been furloughed by 10^th June 2020 at the latest.

To be able to use this Scheme, the employer must claim for an employee for a minimum of 7 days at a time. Longer periods can be recorded if necessary. You cannot claim for more than 1 period at a time (calendar month).

If an employee’s Furlough period spans more than one calendar month, you need to split the claim into however many calendar months that Furlough period lasts for.

There is no maximum limit as to how long an employee can be Furloughed for up to the Job Retention Scheme close date on 31st October 2020.

Employers must agree the new “Flexible Furlough” working arrangements with the employee in advance of their return to work in writing. This should include hours, pattern of work, how long the arrangement is expected to last for and a review date.

Employers will need to record the total contracted hours an employee would normally work in a claim period and also the hours actually worked.

These details need to be kept for a minimum of 6 years.

The employer must pay for the hours worked by the employee. You must pay the employee the current contractual rates as specified in the employee contracts of employment.

The employer will also need to pay the Employers NI and Pension contributions from 1st August 2020.

In addition to the NI and Pension contributions, the employer will also need to contribute 10% of each employee’s wages from 1st September 2020. From 1st October 2020, the employer will need to contribute 20% of each employees’ salary.

An employer’s claim cannot exceed the maximum number of employees that have been previously recorded as furloughed under a previous claim.

An employer will be able to make a claim under the new Scheme rules from 1st July 2020.