What is the furlough scheme?
The Job Retention Scheme (JRS) also known as the furlough scheme, was introduced by the government in March in response to the Coronavirus. Furlough can be defined as ‘temporary leave’.
Enabling businesses whose operations have been impacted by the Coronavirus to furlough staff and receive funding for up to 80% of their wages (to a maximum of £2,500 a month) the aim was to prevent large scale redundancies as the UK went into lockdown.
Rules of the JRS initially stated that staff who had been furloughed could not work for their employer whilst on furlough. And they had to be furloughed for a minimum of 3 consecutive weeks. But this is set to change from the 1st July.
How is the furlough scheme changing from July?
A number of changes to the JRS have been announced since March. The most recent announcement set out a number of changes, including:
- The scheme will close on the 31st October
- From 1st July, furloughed employees can be brought back to work for any amount of time and any shift pattern. Employers can still claim the JRS grant for the hours not worked.
- From 1st August, employers will be asked to contribute towards wages of furloughed staff. With the level of the grant being reduced each month.
These changes are designed to ease the return to work for both employers and employees.
What is part time furlough?
Part time furlough, or flexible furlough, refers to the fact that from the 1st July employers will be able to bring furloughed employees back to work for any amount of time and shift patterns. This means employees can work part time and also be furloughed for part of the time.
Under previous rules of the JRS, staff who had been furloughed had to remain on furlough for 3 consecutive weeks and not carry out any work for their employer.
What impact will part time furlough have on employers?
If you are making use of part time furlough, the key change will be around salaries. Currently the salaries of furloughed staff are covered by the JRS, up to 80% of the individual’s salary to a cap of £2,500 a month.
If you decide to bring staff back on a part time basis and make use of part time furlough
- Employers will need to pay employees their normal hourly wage for the hours that they work
- Employees will then be covered by furlough for the hours that they do not work. So will receive up to 80% of their salary for these hours
Once the flexible, part time furlough rules start from the 1st July, there will also no longer be a requirement for employees to have a minimum of 3 weeks off when furloughed. This should give employers more flexibility and the ability to manage workflow.
Employees are not allowed to carry out any work for you during the hours that you record them being on furlough.
There will also be some more administrative requirements for those employers who want to make use of part time furlough
- Working out your employee’s usual hours. Recording the actual hours they work as well as their furloughed hours for each JRS claim period
- Keep a written agreement of the part time furlough working pattern that you agree with your employees. This record will need to be kept for 5 years.
Are all employees eligible for part time furlough?
No. In order to be able to make use of the more flexible, part time furlough, employees must have previously been furloughed for at least a 3-week period before the 1st July 2020.
The 10th June was effectively the cut-off date for placing people on furlough. This was the last date that someone could be furloughed and complete a full 3-week period of furlough before the 30th June.
From the 1st July, employers will only be able to claim for a JRS grant for those employees who they have previously successfully received a grant for. Some exceptions apply to this so do check the government guidance for full details.
Refer to this government guidance on whether you can claim for employees’ wages through the Job Retention Scheme.