From 1 July, employers will be able to bring back previously furloughed employees for any amount of time and on any pattern of work and claim a grant for the hours the employee doesn’t work.
The last date anyone could have been furloughed for the first time was 10 June. The only exceptions to this are parents who return to work after taking maternity, shared parental leave, adoption, paternity or parental bereavement leave.
If employers furloughed any employee on 10 June, they will be able to move them onto the new scheme immediately from 1 July. However, if employers re-furloughed someone after 10 June, they will have to wait the full three weeks before they can move them onto the new scheme, regardless of whether this ends after 1 July.
Limits on Numbers of People Employers Can Furlough from 1 July
The numbers of employees that are furloughed in any period starting from 1 July can’t exceed the maximum numbers of employees claimed for under the old scheme – returning parents are not included in this calculation.
Claim Periods
Employers must submit any claims under the old scheme by 31 July. After 1 July, employers can’t submit claims that cross calendar months. This means that if employers have staff whose furlough spans June and July, they will need to submit separate claims for June and July – even if they have been furloughed continuously.
The claim period is made up of the days employers are claiming a grant for. Claim periods starting on or after 1 July must (usually) start and end within the same calendar month and must last at least seven days. Employers must include all furloughed staff in one claim even if they are paid at different times and the Government recommends that, if employers can, they should match their claim period to the dates they process their payroll.
Working Out Pay Under the New Scheme
If employers don’t intend to ask staff to return to work, their pay calculations won’t change, although their contribution will increase from 1 August as follows:
August 2020: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions.
September 2020: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
October 2020: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
If staff do return to work part-time employers will need to work out how many hours each employee usually works and offset this from the number of hours they have been furloughed.
Employers will need to decide if their employee has fixed or variable hours. If their pay depends on the number of hours they’ve worked, or they are not contracted to work a fixed number of hours, use the variable calculation. The Government has provided some examples of how to do this.
Keeping Records
Employers will need to keep a copy of all records for at least 6 years including:
- The amount claimed and claim period for each employee
- The claim reference number
- Their calculations
- For employees who are flexibly furloughed, their usual hours including any calculations and the actual number of hours they have worked.
Written Agreement
The guidance states that employers need a ‘new written agreement’ to confirm the new furlough arrangement.