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Flexible Furlough Guidance

Employment Associate Fiona Mendel and Trainee Solicitor Libby Morris look at flexible furloughing, and what that means for employers.

On Friday 12 June 2020, several of the Government guidance documents relating to the Coronavirus Job Retention Scheme (CJRS) were updated to provide further clarification on ‘flexible furloughing’, and useful detail has been provided as to how the CJRS will be changing from 1 July 2020 up until the scheme closes on 31 October 2020.

The key points from the guidance documents are as follows:

  • From 1 July 2020, under the flexible furlough scheme, employers can bring furloughed employees back to work for any amount of time and under any work pattern, whilst keeping them on furlough and claiming the government grant for the hours not worked. The proportions of hours and days worked should be agreed between the employer and the employee.
  • If an employer decides to flexibly furlough employees, a new written agreement should be provided by the employer confirming the flexible furlough arrangement.  If the arrangement changes week by week, the employer will need to confirm each separate arrangement in writing to the employee. The agreement must be consistent with employment, equality, and discrimination laws. The employee does not have to provide a written response. Employers will need to keep a written record of the agreement for five years, and keep records of both the number of hours their employees work and the number of hours they are furloughed.
  • From 1 July 2020, only employees who have been previously claimed for under the CJRS will be eligible for further grants under the scheme. This means that employees must have been previously furloughed for at least 3 consecutive weeks, taking place any time between 1 March and 30 June 2020. Therefore, to meet the minimum 3-week period required by 30 June 2020, the last day an employee could have started furlough for the first time was 10 June 2020. However, it has been confirmed that an employee returning to work from statutory parental leave is still eligible for furlough after 10 June 2020.
  • As of 1 July 2020, as long as an employee is eligible to be furloughed, the minimum 3-week period will be removed, meaning that furlough arrangements between employers and employees can last for any amount of time. However, if an employee was placed on furlough before 1 July 2020, the furlough period will still need to last for a minimum of 3 weeks, regardless of whether it ends before or after 1 July 2020. It is only when placed on furlough after 1 July 2020 that an employee can be furloughed for any period of time.
  • The minimum claim an employer can make through the CJRS portal from 1 July 2020 is for a one week period.
  • The first time employers will be able to make claims for periods in July will be 1 July 2020. 31 July 2020 is the last day that employers can submit claims for periods ending on or before 30 June 2020.
  • The number of employees that can be claimed for in any single claim period starting from 1 July 2020 cannot exceed the maximum number of employees claimed for under any claim ending by 30 June 2020.
  • A flexible furlough claim under the CJRS will be based on the number of hours not worked out of the employee’s normal hours in each claim period.
    • For those employees with fixed hours/pay, the calculation of normal working hours will be based on the number of hours worked in the pay period before 19 March 2020.
    • For those employees with variable hours/pay, the calculation of normal working hours will be the higher of (a) the average number of hours worked in the tax year 2019 to 2020 or (b) the corresponding calendar period in the tax year 2019 to 2020.
  • Employers must keep a copy of the following records for six years:
    • the amount claimed and claim period for each employee;
    • the claim reference number for your records;
    • your calculations in case HMRC need more information about your claim;
    • usual hours worked, including any calculations that were required, for employees who were flexibly furloughed;
    • actual hours worked for employees who were flexibly furloughed.
  • From 1 August 2020, the level of grant will be reduced each month and employers will be asked to contribute towards the cost of their furloughed employees’ wages. The timetable for the changes to the scheme has been set out in our previous article
  • The Finance Bill is due to be amended this week (commencing 15 June 2020) in order to enable HMRC to pursue employers who breach the rules of the CJRS.
  • HMRC may check claims, payments made may be withheld or need to be paid back if they are found to be fraudulent or based on incorrect information. HMRC is likely to look at whether employees have been required to undertake any work prior to 1 July, and whether employers withheld payments to staff claimed for and are likely to consider employers’ filed accounts for the current and last financial years to determine whether an employer traded profitably and thus did not require the grant payments from the CJRS. If HMRC suspects that an employer has broken any of the CJRS rules it will be able to impose a 100% tax rate on the payments.

Should you have any queries on the above or require any employment related advice, please contact Fiona Mendel at or on 020 7725 8033 or Head of Employment, Helen Crossland at or on 020 7725 8034.

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