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Flexible Furlough

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What is Flexible Furlough and how does it affect your business?

How will Flexible Furlough work?

From the 1st July 2020, it will be possible for an employee to work part time and then be furloughed for the remaining hours.  Previously an employee was not able to work at all whilst furloughed.  The furlough grant will be based on the hours that the employee has not worked.  An employer must pay the full employment costs in respect of the hours worked by the employee under the flexible furlough agreement.

Who can be placed on Flexible Furlough?

It is no longer possible to place employees on furlough who have not previously been furloughed.  Only employees who have been furloughed for a minimum of three weeks before 30th June 2020 can use the flexible furlough scheme.  If a previously furloughed employee started a new three-week furlough period after 10th June 2020 you would not be able to start flexible furlough until the three-week period had expired.

Is there a limit to how many days an employee can work?

No there is no limit, and any working pattern is permitted.

Is there a limit to how many employees can be placed on Flexible Furlough?

The number of employees an employer can claim for after 1st July 2020 cannot exceed the number of any previous claim.  For example, if you had claimed for only two employees at a time previously, you could not now claim for three at a time.

Can employees be furloughed who are returning from maternity leave, paternity leave and shared parental leave?

This is an exception to the rule.  Employees returning from maternity leave, paternity leave or shared parental leave can still be placed on furlough even if they had not previously not been furloughed.

Is Flexible Furlough compulsory?

No, employees can remain on full furlough until 31st October 2020 (unless it is extended further).  You could allow some employees to move onto flexible furlough and keep others on full furlough.  If an employee remains on full furlough you need to be aware that there are changes to employer contributions coming into force for furloughed employees over the coming months.  From the 1st August 2020, employers will be required to meet the cost of national insurance and pension contributions.  From the 1st September 2020, employers will also have to pay 10% towards an employee’s wages (resulting in the monthly cap on the furlough grant reducing to £2,187.50). Then from the 1st October 2020, an employer’s contribution towards an employee’s wages will increase to 20% (resulting in the monthly cap on the furlough grant reducing to £1,875).

Is there a minimum length of time an employee can be placed on Flexible Furlough?

There is no longer a requirement for an employee to remain on furlough for three weeks from the 1st July 2020.  This could allow employees to allow a “one week-on/one-week off” rotation, subject to the rules outlined above.

How do I calculate a claim for Flexible Furlough?

Claims for flexible furlough can be submitted from 1st July 2020.  The employer will need to provide information on the actual hours the employee has worked, as well as what their usual contractual hours would have been for the claim period.  A Claim must be made in the same calendar month it started.  You should also avoid making a claim until you know the exact number of hours the employee has worked that calendar month.  Each claim must be in respect of a minimum one-week period.  An employer can only make four claims a month.

The team at FTA Law provides advice to clients across the commercial and healthcare sectors with many of our instructions coming from referrals from long standing clients and industry contacts.

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