What you need to know about flexible furlough and extended furlough through September and October 2020
The Coronavirus Job Retention Scheme (JRS), more commonly called the furlough scheme, allows businesses to claim for 80% of their employees’ wages if it puts them on furlough because of Covid-19. This money goes to the employees.
The Government announced an extension to the JRS at the end of May 2020.
What is ‘the extended furlough scheme’?
The extended furlough scheme is a continuation of the JRS (with some changes – see below).
The new rules apply from July, and the scheme will be in place until the end of October.
What is ‘flexible furlough’?
Employees on furlough can now work some of their regular hours and still receive furlough for the hours they do not work.
Businesses can still ‘rotate’ employees on and off furloughs. So, your colleague might be on furlough one week while you work, and the next week you might switch.
Full furlough is still allowed. When fully furloughed, an employee is still not allowed to do any work for an employer.
Can anyone new be put on furlough?
No. As of 10 June 2020, nobody who was not previously furloughed can be put on furlough.
To count as ‘previously furloughed’, you must have been on furlough for three consecutive weeks between 1 March and 30 June 2020 (it doesn’t matter which three weeks – you could still be eligible if you returned to work before 30 June).
The minimum length of furlough before 1 July was three weeks so, unless you were put on furloughvery late in the game,you are likely to be eligible.
Are there changes to the minimum length of furlough?
Yes. As of 1 July, furlough periods can be any length of time – there is no minimum.
Before that, the minimum length was three consecutive weeks.
What about ‘claim periods’?
A claim period is the amount of time an employer is claiming your wages for. There have been a few changes to the rules around this – including one that says employers cannot claim for periods of furlough that span two calendar months – and it can get complicated quickly.
It’s the employer’s responsibility to work all this out, but to get an idea you can look at the Government guidance, which includes some useful flow charts.
How will my wages be calculated on flexible furlough?
You should still receive 80% of your wages for the hours you would usually work (under your regular contract) but do not.
Unfortunately, it is not as simple as: “I usually work five days per week, and now I work three, so I will get normal pay for 60% of my salary and furlough pay for 40%”.
Again, the ins and outs are complex. The example below is convoluted and it is for a relatively simple situation – if you work irregular shift patterns, for instance, it’s even tougher to work out. Luckily, again, the responsibility lies with the employer.
Example flexible furlough calculation
We will use the case of a paid-monthly employee on flexible furlough during August 2020.
Step 1: Working out hours in the claim period
Step 2: Working out hours on/off
So, Susanne gets 54% of her usual salary; and the remaining portion is paid through furlough, at 80% of her usual pay.
Does the government still pay my furlough wages?
Most of them, but employers are starting to contribute too.
The amount contributed by the Government started tapering off in August, when employers had to start paying their employees’ National Insurance Contributions (NICs) and pension contributions again.
From September, employers will start contributing some wages, too. See the table below (from the Government guidance document):
|Government contribution: employer NICs and pension contributions||Yes||No||No||No|
|Government contribution: wages||80% up to £2,500||80% up to £2,500||70% up to £2,187.50||60% up to £1,875|
|Employer contribution: employer NICs and pension contributions||No||Yes||Yes||Yes|
|Employer contribution: wages||–||–||10% up to £312.50||20% up to £625|
|Employee receives||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month|
Find out more
Claim for wages through the JRS (gov.uk)
To arrange a free telephone consultation please fill in the contact form on this page or email us at email@example.com or contact us on 01708 229444 (Upminster Office), 01277 211755 (Brentwood Office) or 01708 511000 (Hornchurch Office)
This article was written by Alex Pearce, Senior Associate in the Employment Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of September 2020.