On Friday 29th May, the following changes to the Coronavirus Job Retention (furlough) Scheme were announced by the Chancellor:-
Closure to new entrants
The scheme will close to new entrants from 30th June.
Anyone participating in flexible furlough from 1st July, will have had to have been furloughed for a minimum of three weeks by 30th June. Therefore, the last date for an employee to be put on furlough for the first time is 10th June. You must claim for such employees no later than 31st July.
“Flexible furlough”
Until 30th June, it is a condition of the scheme that a furloughed employee must do no work for their employer.
From 1st July, employees will be able to do some work for their employer whilst still staying on furlough. This is known as “flexible furlough”.
Furloughed employees who start to work part time, will be paid in full by their employer for the hours they work. The employer will be able to place the employee on furlough for the hours they don’t work (but which they normally did) and make a claim under the Scheme for those hours.
There is no requirement that an employee must resume working from 1st July – just flexibility that they may.
Government contribution being reduced
Employees on furlough must still receive 80% of their wages when on furlough (up to a maximum of £2,500 per month). The employer’s contribution to the furlough pay will increase over time as set out below:-
| July | August | September | October | |
| Government contribution:
employer NICs and pension contributions
|
Yes | No | No | No |
| Government contribution:
Wages |
80% up to £2,500 | 80% up to £2,500 | 70% up to £2,187.50 | 60% up to £1,875 |
| Employer contribution: employer NICs and pension contributions | No | Yes | Yes | Yes |
| Employer contribution:
Wages |
Not required to contribute provided employee agrees. | Not required to contribute provided employee agrees. | 10% up to £312.50 | 20% up to £625 |
| Employee receives (provided they have agreed in writing) no less than: | 80% up to £2,500 per month | 80% up to £2,500 per month | 80% up to £2,500 per month | 80% up to £2,500 per month
|
Reducing pay or topping up pay
As with the current version of the scheme, employers will still be free to choose to top up employee wages above 80% at their own expense if they wish.
If the employee is not going to receive 100% of their wages it is important that they agree in writing to the reduction in wages.
Further guidance to be published
Further guidance on calculating “flexible furlough” pay is to be published by the government on 12th June.
