What you need to know about the new flexible furlough rules

The government’s new flexible furlough scheme launches on 1 July, giving employers the chance to bring staff back part-time and still claim grants to cover some of their wages. Alan Price of BrightHR explains what employers need to know about the scheme.

Flexible Furlough Scheme UK

Who can go on flexible furlough?

From 1 July 2020 only employees that employers successfully claimed a previous government grant for will be eligible for more grants under the Job Retention Scheme.

This means they must have previously been furloughed for at least three consecutive weeks taking place any time between 1 March and 30 June 2020.

How do I put someone on flexible furlough?

Employers should discuss with employees who they wish to place on the flexible furlough scheme, outlining which hours they will be expected to work. Staff will need to agree on the arrangements of their part-time work.

This agreement should be confirmed in writing and a written record kept of it for five years. 

How much can employers claim through the flexible furlough scheme?

The flexible furlough scheme will allow employers to recover the remainder of wages to a maximum cap. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60 per cent of the £2,500 cap if they are placed on furlough for 60 per cent of their usual hours.

The amount that the scheme will cover will begin to decrease from September 2020, and employers will be responsible for all the national insurance and pension contributions from August 2020, regardless of the employee being on flexible furlough.

How do I calculate working hours when using the flexible furlough scheme?

There are two different calculations employers can use to work out their employees’ usual hours, depending on whether they work fixed or variable hours.

Where the employee’s working hours are fixed, or their pay does not vary with the number of hours worked, the reference period for calculating their hours is the hours your they were contracted for at the end of the last pay period ending on or before 19 March 2020.

Where an employee works variable hours, employers will use the higher of:

  • the average number of hours worked in the tax year 2019 to 2020
  • the corresponding calendar period in the tax year 2019 to 2020

How long must flexible furlough last?

Previously, staff needed to be furloughed for at least three weeks to benefit from the scheme. However, flexible furlough agreements can last any amount of time.

That said, the period that employers claim for must be for a minimum period of seven calendar days. Employees can enter into a flexible furlough agreement more than once.

About the author

Alan Price is a HR expert and CEO at BrightHR, a HR software and support firm offering cloud-based software which records employee absences, responds to annual leave requests, and creates shifts and rotas.

See also

How staggered shifts can help your business through COVID-19

How to calculate redundancy pay for furloughed staff

How can you manage employee loneliness when working from home?

Find out more

Coronavirus Job Retention Scheme (GOV.UK)

Calculate how much you can claim using the Coronavirus Job Retention Scheme (GOV.UK)

Working safely during coronavirus (COVID-19) (GOV.UK)

Image: Getty Images

Publication date: 30 June 2020

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.