Residential property
19 Jun 2020 News

Furlough: The timeline and highlights of the latest publications

We’re now at iteration fourteen of the main Governmental note; have eight new guidance documents; and at the time of writing await the publication of a third Treasury Direction. This drip-feeding of information is undoubtedly down to the speed at which the CJRS has been brought in, but the regrettable consequence is that it’s increasingly likely that employers will inadvertently fall foul of the rules when applying for wages reimbursement. To try to help keep employers right, the timeline and highlights of the latest publications are as follows:

- From 1 July 2020, employers will only be able to furlough those individuals who have been furloughed for at least 3 consecutive weeks at any time between 1 March and 30 June 2020. The only exception to this is an employee returning from statutory parental leave (provided the employer has previously made a claim under the CJRS in respect of other employees by 10 June 2020 and the returning employee was on the employer’s payroll (with an RTI submission made to HMRC) on or before 19 March 2020).

- From 1 July 2020, flexible furloughing will be allowed, whereby employers can agree with employees to bring them back to work part-time on any hours and/or shift pattern the employer needs, whilst keeping them on furlough for the remainder of their contractual hours. Note that from 1 July 2020:

o Claim periods cannot cross two calendar months, and the minimum claim period is 7 calendar days (unless claiming for the first or last day of a calendar month). Note these rules relate to claim periods only – the actual furlough period can cross months or be less than 7 days if an employer wishes. Be aware however that if an employee is furloughed before 30 June then that furlough period must last for a minimum of three weeks, even if it completes after 1 July.

o The number of employees claimed for in a single claim period cannot exceed the maximum number of employees an employer claimed for under any claim ending 30 June 2020. The guidance gives the example of an employer who has submitted monthly furlough claims for 20, 30 and 50 employees. The maximum number therefore of employees who can be furloughed after 1 July is 50 (plus any returning from statutory parental leave, as above).

- 31 July 2020 is the last date on which an employer is able to make a furlough claim for any furlough leave for periods prior to 30 June 2020.

- From 1 August 2020, employers will no longer be able to reclaim employer’s National Insurance and pension contributions in respect of any employees remaining on furlough.

- From 1 September 2020, the Government will only reimburse 70% of a furloughed employee’s salary (up to a maximum of £2,187.50). Employers will be required to top this up to 80% (or more, depending on what has previously been agreed with the employee), plus meet the employer NICs and pension contributions.

- From 1 October 2020, the Government will only reimburse 60% of a furloughed employee’s salary (up to a maximum of £1,875). Employers will be required to top this up to 80% (or more, as above), plus meet the employer NICs and pension contributions.

- On 31 October 2020 the scheme will close.

Undertaking the calculation of a flexible furlough claim is not straightforward. Employers will need to determine the length of their claim period, what to include in the calculation, an employee’s baseline “usual hours”, and then the associated NI and pension contribution payments. The complexity of the claims calculation and administrative burden it will bring may, understandably, deter many.

Finally, the second Treasury Direction removed the explicit requirement for employer and employee to agree in writing to a period of furlough leave (something we discussed in our last article available here). That is to say, an agreement must still be reached, but it can now be confirmed in writing by the employer alone. However, the guidance on flexible furlough provides that "If you flexibly furlough employees you will 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". Illogically, it appears to be the case that employee agreement isn’t required for full-time furlough but is required for part-time furlough. Our advice remains that best practice is to agree any furlough arrangements expressly with employees and to retain that paperwork for six years.

Links to the main Government guidance are available here:
Changes to the coronavirus job retention scheme 
Check which employees you can put on furlough to use the CJRS 
Check if you can claim for your employees’ wages through the CJRS 
Calculate how much you can claim using the CJRS
Claim for wages through the CJRS 
Steps to take before calculating your claim using the CJRS 
Find examples to help you calculate your employees’ wages 

For any questions on the CJRS, you'll find Fiona's details at the top of this article. 

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