Flexible furlough scheme

Find out about the latest UK government changes to the Job Retention Scheme.

The coronavirus lockdown situation is changing rapidly. And with it, the UK government is making adjustments to the Job Retention Scheme.

And that means changes are ahead for furloughing staff. Previously, when you made a claim the government would pay 80% of an employee’s wage.

However, the current scheme closes on June 30th 2020. From then, the law changes. You can no longer apply or the scheme as there’s flexibility available and new rules to understand.

Along with using our furlough navigator tool, you’ll need to manage your staff moving forward. And we explain how you can do this in our guide.

What is a flexible furlough?

It’s the revised furlough scheme and the UK government’s new regulations.

The flexible furlough scheme start date is from the 1st July, you can now return staff back to work part-time.

But you can also still receive government funding for some of their wage. It involves creating a new furlough agreement with employees—you must do this, or you could miss out on the funds.

If you’re wondering, “Would I still be able to use old furlough scheme?” Well, no. You must adapt to the UK government’s new expectations.

How does the flexible furlough scheme work?

From the 1st of July, you can bring your furloughed staff back. And place them on shift pattern or working hours you like.

You can also keep your staff on full furlough—that’s if you want. The flexibility is the new option for you as an employer.

You can still claim their pay from the Job Retention Scheme for any hours they don’t work. And until the end of June 2020, you can still claim 80% of employees’ wages—although you now can’t make new claims at this time.

And employees must have already been on furlough for you to make a claim for this flexible scheme. And that period should have been at least three weeks—although there are exceptions here. These are:

  • Reservist staff returning from active service.
  • Employees returning from leave such as:
    • Maternity.
    • Paternity.
    • Adoption.
    • Shared.
    • Parental.
    • Parental bereavement.

They can still receive furlough for the first time. Although that’s only if you’ve placed another employee in your business on furlough.

Plus, any new staff joining after TUPE can be placed on furlough. That’s if the previous employer has already done so.

Over the coming months, the amount of funds you receive will continue to change.

This is essentially the start of the UK government phasing the Job Retention Scheme out.

That’s unless there are further developments with the pandemic. But, at the moment, you should follow the latest guidelines and updates to the scheme.

But for the months ahead, this is the current plan of action:

  • August 2020: You’ll receive 80% of an employee’s wage to a cap of £2,500. But you’ll need to start paying for National Insurance and pensions contributions, which previously wasn’t the case.
  • September 2020: The UK government will cover 70% of the wage to a cap of £2,187,50. And you’ll need to pay National Insurance and pension contributions. You must also provide the final 10% of employees’ wages so they reach 80% for this month. Up to a cap of £2,500.
  • October 2020: The UK government will pay 60% of wages to a cap of £1,875. You must pay National Insurance and pension contributions. And cover employee wages so they reach 80% of their monthly income. That’s up to a cap of £2,500.

You can, of course, cover the full 100% of your employees’ wages in each respective month. That’s up to your business.

And does the flexible furlough scheme applies to all employers? Yes, it does.

But just to note, the Job Retention Scheme is still set to end on 31st October 2020.

The benefits of a flexible furlough scheme

The purpose of the updates is to start phasing out the scheme, but to also allow your business greater flexibility with returning employees to work.

And some of the other significant benefits include:

  • Return employees as and when you need to. You can arrange with each individual to suit your (and their) needs.
  • Staff no longer have to avoid doing work for you. They can work some of the week and then remain furloughed as and when they need to.
  • Employees receive more flexibility, so can begin a more open return to work—instead of remaining stuck at home, or with nothing to do.
  • You can arrange new working arrangements with staff previously on furlough (if it was before 1st July). In other words, you can return them to furlough again.
  • It’ll continue to support your business, in slightly lower amounts, through to October 2020.

However, the update does start the process of winding the scheme down. And that does mean you’ll, come October, be without financial support if your business is struggling.

You do have several months to prepare for this, though. And we can help there as we have a back to work navigator tool you can use.

This provides you with access to rota planners and COVID-19 risk assessments. Which will all help you get up and running again as soon as possible.

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