Changes to the flexible furlough scheme

Have your employees been furloughed for at least three consecutive weeks between 1 March 2020 and 30 June 2020? If yes, they are entitled to go on the flexible furlough scheme.

The last date for furloughing employees for the first time was 10 June. The cut-off date doesn’t apply if your employees were returning from family-related leave and you have previously furloughed employees. 

What’s new? 

Furloughed employees will continue to receive at least 80% of their wages for normal hours not worked, subject to a monthly cap of £2,500, but the government’s contribution to furlough pay will gradually taper:

  • From 1 August 2020, the government will pay 80% of wages up to £2,500 a month. Employers must pay employer National Insurance contributions (NICs) and employer pension contributions
  • From 1 September 2020, the government will pay 70% of wages up to £2,187.50 a month. To make up the 80% total (subject to the £2,500 cap), employers must pay 10% of wages plus employer NICs and employer pension contributions
  • From 1 October 2020, the government will pay 60% of wages up to £1,875 a month. To make up the 80% total (subject to the £2,500 cap), employers must pay 20% of wages plus employer NICs and employer pension contributions

Updated guidance

On 12 June 2020, the government published more details of the flexible furlough scheme in new guidance notes: 

Existing guidance notes have also been updated to reflect the changes (for links to the notes, see Collection: Coronavirus Job Retention Scheme).

What this means to you 

You don’t need a written agreement to furlough employees in relation to the current scheme – the one that ends on 30 June.

However, if you want to put your employees on the flexible furlough scheme, the latest guidance seems to suggest that a written agreement will be required. Claim for wage costs through the Coronavirus Job Retention Scheme:

Here’s what the employer guidance says: “If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement).”

Claim for wages through the Coronavirus Job Retention Scheme:
The requirement for a written agreement is also included in the guidance for employees, in the section called “What you’ll need”.

However, it’s not clear precisely what needs to be put in writing. For example, do the parties need to agree specific hours in writing? Or can they agree a process for varying hours week to week or month to month? We therefore recommend employers set up a side letter on their current furlough agreements to ensure the position is covered.

If you need any help with this, please give us a call.