The furlough scheme has been updated and companies can claim until October 2020 but there are some changes that will need to be considered:
In June and July, the government will pay 80 per cent of wages up to a cap of £2,500 as well as employer NICs and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for the hours they work.
As furloughed employees can return to work on a part-time basis from 1 July, the new caps will be proportional to the hours not worked.
In August, the government will pay 80 per cent of wages up to a cap of £2,500 and employers will pay employer NICs and pension contributions for the hours the employee does not work.
In September, the government will pay 70 per cent of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will also pay employer NICs and pension contributions and 10% of wages to make up 80 per cent total up to a cap of £2,500.
In October, the government will pay 60 per cent of wages up to a cap of £1,875 for the hours the employee does not work. Employers will also pay employer NICs and pension contributions and 20 per cent of wages to make up 80 per cent total up to a cap of £2,500.
In addition, the old Scheme will be closed to new entrants from 30 June and a new flexible furlough method can be used by employers from 1 July. This will see employers being able to bring furloughed employees back on a part time basis; the hours worked will be funded by the employer and the Scheme will continue to cover employees for the remaining working days of the week. The details released so far are:
- The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June. This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3 week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
- From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim under the Scheme for their normal hours not worked.
- From 1 July, employers will be able to agree any working arrangements with previously furloughed employees.
- When claiming the grant for furloughed hours; employers will need to report and claim for a minimum period of a week.
- This is a minimum period and those making claims for longer periods such as those on monthly or two weekly cycles will be able to do so.
- To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
- Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.