What are the changes to the furlough scheme from 1st July?
From 1st July the furlough scheme changed to a flexible furlough scheme. This means that employees can return to work on part-time hours and remain on furlough part-time.
Employers and employees must agree the hours to be worked and the hours to be furloughed. Both parties must ensure that no work is undertaken during any furloughed hours.
If an agreement on working hours cannot be agreed, the employee may need to remain on full-time furlough.
How long can employees be furloughed for?
Employees can remain on full-time furlough until the scheme ends at the end of October 2020.
From August employees will still receive 80% of their wages but employers will have to start to contribute and pay National Insurance and pension contributions. For the average claim, it is 5% of the gross employment costs that the employer would have incurred if the employee had not been furloughed.
From September the government will cut its grant to 70% of wages, capped at £2,190 per month. Employers will be required to pay National Insurance and pension contributions, followed by 10% of wages to make up the 80% capped at £2,500 per month. This works out at 14% of the average gross costs the employer would have occurred.
In October, the grant will be cut to 60% of wages capped at £1,875 per month. Employers will pay National Insurance and pension contributions and 20% of wages to make up the 80%. This equates to 23% of the gross employment costs employers would have occurred.
Can employees be re-furloughed if they have returned to work?
Yes, if an employee has previously been furloughed for the minimum three-week consecutive period between 1st March and 30th June then they can placed back on furlough.
Can employees be rotated on furlough?
Yes, if these rotating employees have been previously furloughed for the minimum three-week consecutive period between 1st March and 30th June, they can be placed on a rotation basis of work or furlough.
From 1st July rotating employees and furlough will be treated as flexible furlough. Therefore, employers will need to start calculating usual hours, worked hours and furloughed hours in line with the new flexible furlough scheme.
Is there a limit who can be on flexible furlough?
The number of employees that can be furloughed after 1st July in any period cannot exceed the maximum number of employees that were claimed for under the original furlough scheme, any returning parents are excluded from this figure.
For example, if you have been rotating 20 employees on furlough and 10 have been furloughed and 10 have been working, you cannot claim for more than 10 employees at a time, because this is the maximum number of employees that were claimed for originally.
Do employees have to work part-time from 1st July?
No, flexible furlough is an option, it is not a requirement. If an employer cannot provide any work, an employee can remain on full-time furlough.
Is there a minimum or maximum number of hours of work for an employee on furlough?
No, any working patterns need to be agreed between employer and employee. This can be the same hours every week or can change from week to week.
What is the minimum furlough and claim period?
From 1st July the rules for furlough are:
- there is no minimum number of weeks or days that an employee must be on furlough;
- claim periods must start and end within the same calendar month
- claims through the portal need to cover a period of one week unless that claim is for the first or last few days of a month.
How do we take up the flexible furlough scheme?
Employers will need a new written flexible furlough agreement with employees. This agreement will need to cover hours working and hours that will be furloughed.
Employers will also need to ensure they have a system for calculating hours worked and not worked.
How do you calculate usual hours of work for fixed hours’ employees?
This is done by calculating usual hours worked for the period claiming for. For employees’ whose pay is fixed and does not vary by hours worked, guidance says this is based on the contracted hours an employee was contracted for at the end of the last pay period on or before 19th March 2020.
Salaried employees are required to work whatever hours, how will this work?
You are required to use their basic hours that are stated in their contract. E.g 35 hours, even if these employees normally work more hours in a week.
How do you calculate usual hours for employees whose hours and pay varies?
For employees who work variable hours you must calculate usual hours by looking back at the hours worked last year. Their hours must be calculated at the higher of:
- Average number of hours worked in the tax year 2019 to 2020;
- The corresponding calendar period in the tax year 2019 to 2020.
How are non-working hours calculated?
The non-worked hours that can be claimed through the furlough scheme are calculated as follows:
Take the employees usually hours in the claim period and subtract the hours worked in the claim period.
What happens if a company cannot afford the minimum contributions that are required from August?
Employer contributions from August are mandatory if employees are receiving the furlough grant. If a company cannot make the contributions then they will need to remove employees from the furlough scheme and look at other options, such as agreeing new terms and conditions with employees, short time working or redundancies.
Who should stay on full-time furlough?
Clinically extremely vulnerable employees that are shielding should remain on full-time furlough.
Other employees may not be able to return to work on a part-time basis or a rotation basis because they are clinically vulnerable, cannot manage their caring responsibilities, have dependents or because they would need to travel on public transport and don’t feel safe. These employees may be best remaining on full-time furlough.
What happens when the scheme ends in October?
It is expected that employees will be able to return to work. If trading conditions have not improved sufficiently to take all furloughed employees back when the scheme ends, then employers will need to make redundancies.
How much notice do employees need to return to work?
There is not a legal requirement of how much notice an employee should be given to return to work, this may have been specified in their furlough letter, if not then one-week notice is deemed appropriate.
What happens if an employee becomes sick whilst on furlough?
It is up to an employer to decide whether to move them onto SSP or keep them on furlough.
If the employees remain on furlough their salary can be claimed through the furlough scheme.
Employers with less than 250 employees can use the coronavirus statutory sick pay scheme which will repay up to two weeks SSP starting on or after 13th March 2020 for employees who are unable to work because they either have coronavirus or are self-isolating at home.
If an employee working under a flexible furlough pattern falls sick or is told to self-isolate when they are due to be working, usual sick arrangements should apply and companies should pay the SSP or company sick pay due. For any absence relating to coronavirus the three-day waiting period is removed and they are eligible for SSP from day one.
Do employees still accrue holiday while furloughed?
Yes, as they remain employed.
It can be agreed to reduce any enhanced holiday above the statutory requirement of 5.6 weeks per year, to reflect the fact the employee has been on furlough, but employees still have their right to the 5.6 weeks’ annual leave under the working time regulations.
Can employees be asked or take holiday allowance while on furlough?
Yes, employees can be on holiday during furlough, so if an employee has pre booked holiday they will be able to take them.
If employers want to request employees take holiday while on furlough, then they need to give double the notice. E.G for five days’ holiday, 10 days’ notice would be required.
Guidelines from the government states employers should consider whether any restrictions such as social-distancing or self-isolation would prevent the employee from resting, relaxing, and enjoying leisure time, which is the purpose of holiday days.
What happens to bank holidays during furlough?
If employees normally work on bank holidays, they will be on furlough for these.
If employees usually have bank holidays off, then guidance says:
- Can agree with the employee to take the bank holiday as annual leave, or give them notice to take this day as annual leave and pay holiday for the day
- Agree that the employee defers the holiday to another date and pay furlough for that day.
What is the payment for holidays during furlough?
Employers must pay employees their usual holiday pay rate for the statutory minimum 5.6 weeks. Employers will be requited to fund any top-up to full holiday pay themselves and will not be able to claim this through the furlough grant scheme.
Employers can agree a different rate of pay for any holiday over the 5.6 weeks’ statutory entitlement.
If you would like further information on any of the above topics, please contact Clover HR on 0121 516 0299 or email us at firstname.lastname@example.org