Covid-19 Flexible Furlough

Flexible furlough . . . the latest update

On 20 March the government announced the introduction of the Coronavirus Job Retention Scheme in an effort to help employers avoid the need to make redundancies caused by the impact of COVID-19. The scheme opened on 20 April.

Until 1 August, all UK employers can claim a grant from HMRC to cover 80% of employees’ wages (capped at £2,500 a calendar month) who are not working but kept on the payroll (furloughed), plus the associated employer national insurance contributions on that wage.

Since the scheme was introduced there have been a number of changes to it, the most significant of which were announced in May.  On 12 June the government published guidance on how the scheme will operate between July and the end of October. 

  • The scheme will be extended to 31 October.  It is unlikely the scheme will operate beyond this point.   
  • The scheme closed to new entrants from 30 June which the exception of employees returning from certain types of family leave, military reservists returning from a period of active duty or employees who TUPE transfer to a new employer after 10 June.  So from 30 June employers will only be able to furlough employees that they furloughed for a full three week period at any time between 1 March and 30 June.
  • From 1 July, furloughed employees can return to work for any amount of time and any shift pattern. Employers must pay in full for days worked and can claim under the scheme for days not worked, subject to the relevant caps.
  • From 1 August, the level of grant under the scheme will be gradually tapered to reflect the government’s intention that the workforce should slowly be returning to work as follows:
    • From 1 August employers will be required to pay the employer national insurance contributions and employer pension contributions on the furlough pay.
    • From 1 September employers will be required to pay 10% of employees’ furlough pay capped at £312.50 and the government will pay 70% of employees’ furlough pay capped at £2,187.50.
    • From 1 October employers will be required to pay 20% of employees’ furlough pay capped at £625 and the government will pay 80% of employees’ furlough pay capped at £1,875.
  • 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.

If you are intending to bring employees back to work on a part-time basis and your existing furlough agreements do not extend beyond 30 June then the Employment Team at Talbots can assist you with putting in place new flexible furlough agreements.

Please contact Reyhana Koser  or Eleanor Robinson-Brady in our Employment team, or call us on 0800 118 1500 for more information.