As anticipated, on 12 June 2020 the Government released a raft of further guidance concerning the Coronavirus Job Retention Scheme (“CJRS”) and the changes which will be implemented from 1 July 2020. The new and updated guidance sets out who will be eligible from 1 July 2020 and explains how “flexible furlough” will operate. We set out below the key changes that employers need to be aware of.
Summary of key changes
Which employees can employers claim for from 1 July?
From 1 July, employers will only be able to claim a grant for employees that have already been furloughed for three consecutive weeks between 1 March and 30 June 2020. Therefore, the last date an employee could have started furlough for the first time was 10 June 2020.
There is an exception for employees who have returned from maternity, shared parental, adoption, paternity or parental bereavement leave (“Statutory Parental Leave”) after 10 June. These employees can be furloughed after 10 June provided that:
- the employer has previously submitted a CJRS claim for another employee in the organisation between 1 March and 30 June 2020;
- the employee is being furloughed for the first time;
- the employee started their Shared Parental Leave before 10 June and returned from that leave after 10 June 2020; and
- the employee was on the employer’s PAYE payroll on or before 19 March 2020.
Number of employees that can be claimed for in each claim period
From 1 July, the number of employees that employers can claim for in any single claim period cannot exceed the maximum number of employees that the employer claimed for under any claims ending by 30 June. For example, if an employer previously submitted three claims between 1 March and 30 June 2020, in which the total number of employees furloughed was 20, 30 and 50 employees respectively, the maximum number of employees that the employer can furlough in any single claim from 1 July 2020 will be 50.
When calculating the maximum number of employees that employers can claim for, the number of employees being furloughed for the first time due to them returning from Shared Parental Leave should be added to any previous maximum.
As there is a maximum number of claims which can be made in each claim period, employers may wish to consider whether to rotate employees on furlough to ensure they do not exceed the maximum.
From 1 July employers will be able to “flexibly furlough” their employees. This means employers can bring their employees back to work for any amount of time and on any work pattern. Employers will be able to claim a grant for the hours which flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.
If an employer wishes to flexibly furlough staff, they will need to obtain their employees’ agreement and keep a written agreement that confirms the new furlough arrangement. This agreement must be kept for 5 years. Employers must also keep records of how many hours their employees work and the numbers of furloughed hours for 6 years.
The new steps to take when calculating wages guidance (“Calculating Wages Guidance”) provides detailed information for employers on how to decide the length of the claim period. We set out some of the key points below:
- Claims for any periods starting before 1 July must end on or before 30 June, even where an employee is furloughed continuously. Separate claims will need to be submitted to cover the days in June and the days in July.
- The latest that employers can submit claims for furlough periods ending on or before 30 June is 31 July.
- The earliest that employers will be able to submit claims for furlough periods commencing in July will be 1 July.
- Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless an employer is claiming for the first few days or the last few days in a month.
- Employers can only make one claim for any period, so they must include all furloughed or flexibly furloughed employees in one claim.
- When claiming for flexibly furloughed employees, employers should not claim until they are sure of the exact number of hours they will have worked during the claim period. If employers claim in advance and the employee works more hours, then the employer will have to pay back some of the grant to HMRC.
Working out employees' usual hours and furloughed hours
If employers flexibly furlough their employees, they will need to calculate their employees’ “usual hours” and record the actual hours that they work as well as their furloughed hours for each claim period.
If an employee is not contracted to a fixed number of hours or their pay depends on the number of hours they work, employers will need to work out their employees’ “usual hours”. The Calculating Wages Guidance sets out how to do this.
HMRC has provided an example of how to calculate the amount that employers should claim for an employee who is flexibly furloughed as well as new guidance on how to calculate how much employers can claim using the CJRS.
If you require specific advice or support in managing any of the workforce issues arising from this ever-changing situation, including advice on which staff are eligible for the CJRS or alternative options available in managing your workforce, please contact Jodie Sinclair or Julian Hoskins at Bevan Brittan’s employment law team.
For further support and advice relating to the impact of COVID-19, please view our COVID-19 Advisory Service page.