New Rules re the Coronavirus Job Retention Scheme (CJRS) - Flexible Furlough

The Scheme is now closed to new entrants (save for circumstances where an employee has returned from a period of maternity or family leave), meaning that flexible furlough will be limited to those who have previously been furloughed for a minimum of three weeks as at 30 June 2020. The employee does not need to have been on furlough as at 30 June, simply that they have previously completed a period of three weeks of furlough leave during the operation of the Scheme.

From 1 July, employees can return to work for some days (or even part days) and be furloughed for the rest of their contractual hours. The cap on the amount of furlough that can be claimed is proportionate to the hours that are not worked by the employee. Employers will need to update their calculations for employees where they elect to use flexible furlough.

Detailed guidance on the use of the scheme can be found here and example calculations of claims and “contractual hours” here.

Key points to note are:

1. From 1 July claims cannot straddle a calendar month end. If your payroll period is not a calendar month then “split claims” will need to be made.
2. The calculation of contractual hours are not straightforward and, for employees who work variable hours, HMRC will require a detailed calculation of the average hours in the previous tax year (or to the date of furlough if this is before 6 April 2020) and the corresponding period for the previous year. Even now guidance is being sought by the ICAEW regarding the calculation of contractual hours.
3. All claims up to 30 June 2020 must be made by 31 July 2020.
4. Detailed records must be maintained to support these claims
5. The Scheme does not set any form of working pattern, giving total flexibility to the employer to agree with the employee the pattern of work that they see fit. However, the employer must enter into a new Agreement with the employee to set out the terms of their flexible furlough and the existing rules about not working for the employer at the same time as being furloughed remain unchanged. You will need to check the terms of this agreement with your HR/Legal advisers.

For further help and advice email Mike Young at [email protected]