Furlough Leave – The Scheme Extends with More Flexibility

Following the recent news from Rishi Sunak with regards to the extension of the Coronavirus Job Retention Scheme, there have been some positive steps for provision up until the end of October 2020.  There are further details due to be published on 12 June, but here’s what we know so far.

If you have furloughed any of your employees for a minimum of three weeks from the commencement of the scheme in March, they will be applicable for making use of the flexible furlough from 1 July 2020.

However, if you have employees which have not ever been placed on furlough and you wish to make use of the scheme for them following 1 July 2020, they will need to be on furlough for a minimum of three weeks prior to 30 June, so now is the time to decide on whether to furlough them.  They will have to be furloughed on 10 June for three weeks and you will need to gain their agreement in writing.

Here’s an overview of the new furlough leave timeline:

• 10 June 2020 will be the last day that employers can place ‘new’ employees on furlough. The scheme will be closed for new entrants after this date.
• from 1 July, ‘flexible furlough’ is being introduced, meaning employees will be able to work part-time and be furloughed part-time. Businesses will decide how that will work (in terms of the time split).
• from 1 August, employers will have to pay employee’s National Insurance contributions and pension contributions and can no longer reclaim them through the CJRS.
• from 1 September, the government will only reimburse 70% of the salary (up to a maximum of £2,190). Employers are required to top-up to 80% (or more, depending on what the employer agreed with the employee).
• from 1 October, the government will only reimburse 60% of the salary (up to a maximum of £1,875), and employers will continue having to top up to 80% (or more).
• the furlough scheme will close on 31 October 2020.

Full guidance can be found here: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

Team PSHR are here to help, so please do get in touch if we can help you with any of your HR needs.