Furlough Scheme Version 2 – flexible furloughing and what we know so far
On 29 May 2020, the Chancellor heralded the end of the Coronavirus Job Retention Scheme (Scheme) and introduced the concept of ‘flexible furloughing’ from 1 July 2020, which will see a tapering of the Scheme until its final closure at the end of October. Employer contributions to payments made to furloughed employees will also be introduced.
Whilst we are waiting for further guidance from the government on how ‘Version 2’ of the Scheme will work in practice, here is what we know so far:
• Only employees who have been furloughed prior to 30 June 2020 will be eligible to be furloughed from 1 July 2020. In practice, this means that only employees who have spent at least 3 weeks on furlough prior to 30 June and have been included on a claim to HMRC can be furloughed after 1 July 2020.
• If employers are considering furloughing staff who have not previously been furloughed after 1 July 2020, then they need to place them on furlough no later than 10 June 2020 so that they can spend at least 3 weeks on furlough before ‘Version 1’ of the Scheme closes.
• From 1 August 2020, employers will be required to pay employer national insurance and pension contributions in addition to the sums claimed under the Scheme. If an employer cannot afford this then the employee must be taken off furlough.
• It is still within the employers discretion to decide who to flexibly furlough; it is not something an employee can demand.
• If an employee is placed on flexible furlough a new written agreement with the employer will need to be entered into setting the new working arrangements.
• In terms of pay for flexibly furloughed employees, employers need to pay employees for the hours they have worked. Employers can then claim the grant via the Scheme for the hours the employee did not work, calculated by reference to their usual working hours.
As with all things related to the Scheme, the devil will be in the detail and we await publication of the promised guidance on flexible furloughing and how employers should calculate claims on 12 June 2020.
If you have any questions on flexible furloughing please contact Blacks Solicitors here.