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Navigating flexible furlough

July 5th, 2020

Following the introduction of furlough leave to the UK in March, the Government has now introduced more flexibility to the scheme – allowing employees on furlough leave to be brought back into work part-time from July 1st.

Furlough leave was introduced as part of the Coronavirus Job Retention Scheme to reduce the number of expected redundancies as a result of the coronavirus pandemic. Many employers found the amount of work they had for the employees had noticeably decreased, either due to lack of consumer demand, difficulties in the supply chain or temporary business closure.  

The previous scheme allowed employers to ‘furlough’ employees, meaning they would complete no work for the employer but remain an employee and still be paid at least 80% of their wages (capped at £2,500 a month).Now, from July 1st, employers are able to bring employees back in to work for the time they need them, while they remain on furlough leave for the time they are not needed.

For example, an employee contracted to work five days a week could be brought back for two days – and remain furloughed for the remaining three.

Flexible furlough:  rules employers must  know

Employees have to be paid their complete wage for the time they work. Aas an employer you cannot claim this back from the Government. However,  You are still able to claim the 80% of their wages for their furloughed time back.

A furloughed employee being placed on the flexible furlough scheme must have been furloughed for at least three weeks before June 30th. Unless they are a parent returning to work following parental leave, people who have not been furloughed previously cannot be placed on the new scheme.

You must get an employee’s written agreement to change their furlough agreement.

Upcoming key dates for furlough changes

While this flexibility is the first major change to be made to the furlough scheme, more are coming as it winds down over the next few months.

Currently employers do not have to contribute towards furloughed employees wages, although they are able to top up the 80% the employee receives if they choose to. However, this is set to change:

  • August: employers must start making National Insurance and pension contributions.
  • September: the Government will only cover 70% of a furloughed employee’s wages and employers will have to pay the additional 10%. This is not optional like the current top-up from 80% is.
  • October: the Government contribution will drop to 60% and the remaining 20% must be covered by employers.
  • October 31st: the furlough scheme ends.

Should any of these dates or any of the rules around furlough leave change, the employment team at Verisona Law will keep you updated.

The coronavirus pandemic has had a massive impact on employment law – from furlough leave to flexible working. If you’re unsure of anything, get in touch today.