The Flexible Furlough Scheme

Posted On: 15th June 2020

The Flexible Furlough Scheme begins on 1st July 2020. From that date, employers may agree with previously furloughed employees that they will return for any amount of time and any shift pattern agreed. [Although if you have ‘re-furloughed’ previously furloughed employees between 10 June and 1 July, the employee must be ‘fully furloughed’ for a minimum period of 3 weeks before they can be ‘flexibly furloughed’. 

Employers must confirm the flexible furlough agreement in writing. This will ordinarily require a new agreement as in any previous agreements the employee will have agreed to ‘cease to work’. 

Where a previously furloughed full-time employee returns to part-time work, employers can continue to claim the CJRS grant for the balance of pay to bring employees up to 80% of their ordinary full-time pay.

Under the Flexible Furlough Scheme, employers must report and record three matters.

  1. hours actually worked by employees;
  2. the ‘usual hours’ an employee would have worked but for the decrease in hours due to the Coronavirus pandemic; and
  3. the number of furloughed hours which the employee has been furloughed by during the claim period.

This information must be kept by the employer for a minimum of six years. Employers and employees may agree to flexible furlough of any hours they wish. When claiming a grant for furloughed hours, the minimum claim period is seven calendar days.

Hours actually worked by employees are, of course, simple to record. Calculating ‘usual hours’ and ‘furloughed hours’ are a little more complicated and you should speak a HR specialist in the first instance. This is especially the case where you have employees that work variable hours.

Employers are entitled to continue to “fully furlough” employees who do not do any work for the employer in which case, the calculations for ‘usual’ and ‘furloughed’ hours do not need to be performed.

How is an employee paid if they are working and on furlough?

Employees will receive full pay for all hours that they actually work under the Flexible Furlough Scheme. Employers will pay this element themselves, and in full. Subject to the cap as to amount and 80%, employers will be able to claim for the shortfall in hours between hours actually worked and hours normally worked.

Calculating the number of working and furloughed hours for each employee

The Flexible Furlough Scheme allows employees to work for as many hours as agreed with their employer and for their employer to claim for the balance between hours worked and the employee’s usual hours of work.

Once the usual hours of work have been calculated, the employer subtracts the number of hours actually worked by the employee under the Flexible Furlough Scheme. The balance is the sum which can be claimed by the employer.

For example, if an employee usually works 40 hours in a claim period but only actually works 20 hours, the employer would be able to claim for the remaining 20 hours under the Flexible Furlough Scheme.

The length of the claim period

There are significant changes regarding the technicalities of claiming. The key points are set out below;

Claims for any periods starting before 1 July must end on or before 30 June. This is the case even where an employee furloughed in June continues to be furloughed full time in July. This may mean that claim periods will differ from the pay periods.

Claims for periods ending on or before 30 June must be made by 31 July 2020.

Claims starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless claiming for the first few days or last few days of the month.

If possible, the claim period should match the dates that payroll is processed. An employer can only make one claim for any period and this must include all furloughed and flexibly furloughed employees even if you pay them at different times.

An employer can claim before, during or after payroll is processed and can usually make the claim up to 14 days before the claim period end date and do not have to wait until the end of a claim period to make a claim. 

When claiming for employees who are flexibly furloughed an employer should not claim until the employer is sure of the exact number of hours’ they will have worked during the claim period. 

If you have any queries regarding the Flexible Furlough Scheme or anything else HR or Employment law related please do not hesitate to get in touch with a member of the team by calling 01926 355560 or emailing info@absoluteworks.co.uk. You can also complete the contact us form here