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On Friday 12 June 2020, HMRC issued further guidance on the Coronavirus Job Retention Scheme (“CJRS”). This guidance outlines the details of the ‘flexible furlough scheme’ which can be utilised from the beginning of July. Under the flexible furlough scheme, employers can bring back furloughed employees on a part-time basis while still being able to receive funds under the CJRS in respect of the hours the employee is not working.  

Flexible Furlough Scheme

From Wednesday 1 July, employers may agree part-time working arrangements with furloughed employees for ‘any amount of time and any shift pattern’ through the new flexible furlough scheme. Employers will be required to pay employees in full (i.e. at 100% of normal salary) for the hours they work. Normal hours which are not worked will continue to be covered by CJRS grant (i.e. 80%/up to £2,500 per month until the end of July, and reducing incrementally thereafter).

Where flexible furlough is in operation, the minimum furlough period of three weeks will no longer apply and arrangements made in line with flexible furlough may last for any period provided the furlough period commences on or after 1 July 2020. However, employers will only be able to make a claim for a specific period once they know how many hours the employee will work that month. If the employer claims for too many hours under the scheme, they will be required to make a repayment to HMRC.

Despite the flexible furlough scheme being an option from 1 July, employers may continue to furlough employees for their full hours.

New Written Agreement

If employers decide to implement flexible furlough, they must ensure to implement and keep a record of a new written agreement’ between them and the employee.

Employers must ensure that:

  • The agreement is consistent with employment, equality and discrimination laws;
  • A written record of the agreement is kept for five years;
  • A record of the number of hours their employees work, and the number of hours they are furloughed is kept for a period of six years.

Employer Contribution

The guidance provides a timetable outlining the way in which CJRS grants will be tapered over the coming months:

  • June and July: The government will pay 80% of wages up to a cap of £2500, as well as employer National Insurance Contributions (ER NICs) and pension contributions. From 1 July, employers will be required to pay employees for the hours they work.
  • August: The government will pay 80% of wages up to a cap of £2500. Employers will be required to pay ER NICs and pension contributions.
  • September: The government will pay 70% of wages up to a cap of £2187.50. Employers will pay ER NICs and pension contributions and 10% of employee wages (up to £312.50) to ensure they receive 80% in total up to a cap of £2500.
  • October: The government will pay 60% of wages up to a cap of £1875. Employers will pay ER NICs and pension contributions and 20% of employee wages (up to £625) to ensure they receive 80% in total up to a cap of £2500.

The CJRS will end on 31 October 2020

Although employers will be required to top up employee wages to ensure they receive 80% total, they may continue to choose to top up wages beyond this if they wish.

Making Claims

The last day in which employers can submit claims for periods of furlough ending on or before 30 June is 31 July 2020.

Employers will not be able to claim for days in July until 1 July 2020. From July onwards, claim periods will not be able to span multiple months.

Exceptions to the Closure of the CJRS to new entrants

The updated guidance from HMRC highlights that the date in which employers can no longer furlough employees for the first time (10 June) will not apply to those who are returning from family-related leave.

Family-related leave includes:

  • Adoption
  • Maternity
  • Paternity
  • Parental Bereavement
  • Shared Parental

The full updated guidance can be found here: https://www.gov.uk/government/collections/coronavirus-job-retention-scheme

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