The New Flexible Furlough - Complexities Explained
We hope you have taken some time out of the business during this last week to enjoy the glorious weather we have been having.
As we mentioned last week there have been so many updates from the Government with respect to the support offered during these tough times that sometimes it is difficult to remember all the details. Although, hopefully by now you have got used to the idea of visiting our website if you want to refresh yourselves on any of our previous articles. Or as many of you have done to contact one of the team via phone or email.
There are some more changes round the corner.
From 1st July the Job Retention Scheme (better known as furlough scheme) is changing to coincide with the re-opening of our economy. Here we take you through some complexities you may come across as the new scheme begins to take effect.
The finer details you should be aware of:
From 1st July you can bring back employees who have been furloughed before on a part time basis. The flexible furlough claims will be based on actual hours worked versus the normal contractual hours. You should agree the hours and shift patterns now if you are considering bringing someone back from next month on a reduced hours basis. These hours will not be set in stone and can change again.
Don’t forget it is also good practice to give your team at least 48 hours’ notice. They may have committed their time elsewhere to helping a charity or being there for an elderly person or someone who is shielding. It is important to show empathy to your workforce.
It is also advisable to keep a record of the new written agreement that you will have reached with the employee before they come back on a flexible basis. The record needs to be kept for five years as per HMRC guidance.
The 3 week rule
The rule to remember is that if you are going to furlough anyone going forward, they must have been furloughed at some point before now for at least three weeks. This was the minimum length an employee could be furloughed in the old scheme effective from 1st March 2020 to 30th June 2020.
Under the new flexible furlough scheme there is no longer a minimum period, but the employee must have been furloughed under the old scheme. From 1 July, flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.
Once you bring the worker back on a flexible basis you simply pay them for the hours they have worked and make a furlough claim for the hours not worked as per their contract.
The 7 days rule
Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days, unless you are claiming for the first few days or the last few days in a month. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.
Any claim for periods on or before 30th June must be made by 31st July.
We understand that there is a lot to digest with all the small changes but don’t forget the full set of rules are on our website and here is the link:
Where we prepare the payroll for you we will be working with you over the coming weeks and months as you start to bring your employees back to work.
It is very important that the record keeping is precise with regards to the variable hours worked. We have designed a pre-populated spreadsheet and if you would like a copy please get in touch.