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The Government has updated its guidance on the Coronavirus Job Retention Scheme, confirming that from 1 July 2020 employers will be able to operate “flexible furlough”, permitting part-time work and part-time furlough leave. This is a welcome change to the scheme which, since its inception on 1 March 2020, has required staff on furlough leave to cease all work.
Only those employees who have been furloughed for at least three consecutive weeks between 1 March and 30 June are eligible under the revised scheme. The final date to furlough new eligible employees was 10 June (unless the employee is returning from statutory family-related leave after that date).
Under the new provisions, employers will have flexibility to agree with previously furloughed employees that they can return to work for any amount of time to suit the needs of the business. For example, a furloughed employee who normally works five days in a working week may return to work for two days (and be paid in the normal way) and be on furlough leave for the remaining three days of their usual working week. Employers can apply for the grant under the scheme for any days spent on furlough leave. During the period of furlough, employees must not do any work which generates revenue for their employer. As previously permitted under the scheme, the employee can still complete training and volunteer work.
Employers now need to consider how flexible furlough will work in practice with their existing staff arrangements and, importantly, how it will be monitored and recorded. We recommend employers agree flexible furlough arrangements with staff and document them in writing. Systems should be put in place to record hours worked. Records relating to the furlough scheme and payments under it must be kept for six years.
The way in which claims are processed under the scheme is also changing. Claims for periods ending on or before 30 June need to be submitted by 31 July as a separate claim. After 1 July, employers cannot make claims that span different calendar months. This is to reflect the fact that the support provided by the scheme will be reducing each month until it ends on 31 October 2020. Whilst flexible furlough agreements can last for any amount of time and there is no longer a requirement to furlough an employee for a minimum of three consecutive weeks, the minimum claim period is seven calendar days (unless you are claiming for the first or last few days in a month which relates to a claim period). HMRC has updated its online calculator and provided examples to assist employers with calculating claims.
Finally, from 1 July, there is a limit on the number of employees for whom an employer can claim. This cannot be higher than the maximum number of employees for whom an employer has previously claimed. For example, if an employer submitted claims for 20, 50 and 30 employees in previous claims, they will be limited to a maximum of 50 employees in later claims (plus eligible employees returning from statutory family-related leave).
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