This blog seeks to provide answers to the common questions that employers have in respect of the flexible furlough scheme.
Please note that this blog is supplemental to our recent update “Flexible furlough – How does it work” which explains (with helpful examples) on how employers can calculate pay for employees moving to a flexible furlough arrangement.
9 key questions on the flexible furlough scheme answered
What is flexible furlough?
As the name suggests, flexible furlough is designed to give employers more flexibility in respect of their employees who are currently on furlough. Previously, furloughed employees were not allowed to undertake any work for their employer whilst they were on furlough. From 1st July, the flexible furlough scheme changes this rule, allowing for furloughed employees to work part time for their employer for a certain number of hours and remain furloughed for the rest. For example, an employer could decide to bring back an employee to work Mondays and Tuesdays (or 16 working hours) each week but keep the employee furloughed for the rest of the days (working hours) in each week.
How long can a flexible furlough arrangement last?
After the 1 July 2020, there is no need to have a minimum three weeks for the furlough arrangement. However any claim for the furlough grant must be for a minimum of one week, so it is sensible to plan in blocks of weeks. This will also be helpful from a record keeping perspective.
How can I place an employee on flexible furlough?
Employers will need to provide written confirmation to an employee of the flexible furlough arrangement they require an employee to undertake. The government guidance refers to a flexible furlough arrangement as a “new” agreement therefore, this is a separate agreement from the initial furlough communications between employer and employee.
On this basis, it would be advisable for employers to telephone the employee to set out their intentions for a flexible furlough arrangement before following up with a new letter to the employee, rather than amending the initial furlough letter, setting out (at the very least) the basic details of the flexible furlough arrangement such as which hours the employee is now required to work and which hours an employee will remain furloughed. If you would like any assistance in preparing a flexible furlough letter please contact a member of the Employment team.
How do I pay employees who are returning to work on the flexible furlough scheme?
Employees who return to work on a flexible furlough basis are entitled to their full contractual pay for those hours that they work i.e. their rate of pay prior to being furloughed. This is subject to whether an employer and employee have mutually agreed (in writing) to change the contractual terms of the employee’s contract to reduce their pay and benefits.
As before, employers will still be able to claim for the remaining hours not worked through the grants available under the furlough scheme. However, employers will have to start contributing to the costs of the employees from August as the furlough scheme begins to taper until its conclusion in October.
How is holiday accrued whilst on flexible furlough?
It does not matter if an employee remains on full furlough or is now partially furloughed. Holiday will accrue in the same way i.e. at the full rate of pay. This means, if a partially furloughed employee decides to take any of their furloughed hours as holiday, an employer will have to top up the employee’s pay to their full contractual rate for those hours.
Can I still have employees on full furlough?
Yes, there is no obligation for employers to make use of the flexible furlough scheme therefore, employers do not have to place any employees on a flexible furlough arrangement if they do not wish to. The furlough scheme runs until the end of October therefore, employers can keep employees on furlough up until this point.
However, they will have to contribute to the costs of any furloughed employees from August and bear all the costs of the employees once the scheme ends on October 31st 2020. For more details on this, please see my blog on the changes to employer contributions.
Can I still furlough employees?
No, the deadline to place employees (who have not previously been on furlough) passed on 10th June 2020 as there is a requirement that any furloughed employee must have been furloughed for a minimum of 3 consecutive weeks prior to 30th June 2020.
However, there is a limited exception to this rule for certain employees who are returning to work from family related leave after the 10th June deadline. This provides that any employee returning from any of the following types of leave:
- shared parental
- parental bereavement leave
will still be eligible for the furlough scheme even if they have not previously been furloughed by 10 June, provided that the employer has used the furlough scheme for other eligible employees by that date.
Is there a maximum number of employees that can be furloughed?
Yes, the number of employees that can be furloughed at any one time from 1st July cannot exceed the maximum number of employees the employer claimed for in any claim period prior to 30 June, plus any employees who return to work after 10th June from family related leave (as described above). Therefore, if an employer claimed for 30 workers in the April period and then subsequently claimed for 45 workers in the May period, the maximum number of employees that the employer could claim for going forwards, from 1st July, would be 45 plus any employees who return to work after 10th June from family related leave.
What records do I have to keep?
The record keeping requirements are broadly the same as before, just updated to reflect flexible working. Therefore you should keep, for 6 years, records of:
- The amount claimed and the claim period for each employee;
- The claim reference number;
- Your calculation of the figures claimed;
- Usual working hours;
- Actual working hours for employees flexibly furloughed.
The government have provided an online furlough calculator. We would suggest you use this calculator to confirm your figures and for record keeping save a copy of the online calculator on to the employee’s personnel record.
Unless it is clear what hours are being worked from your ‘written agreement’, we are also recommending keeping a written record of hours or timesheet for staff and retaining this safely.
If you have any queries relating to the furlough scheme please contact a member of the employment team.
This blog was co written by Fred Chandler, Trainee.
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