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Furlough – The Next Stage

There are significant modifications to the government’s furlough scheme from 1 July 2020 onwards including new flexibility to bring furloughed staff back to work on a part time basis and continue to be furloughed for the remainder in proportions to be agreed.

From 1st August employers will have to contribute to the costs of national insurance and pension contributions of furloughed workers.

From 1 September 2020 will be required to contribute to furloughed workers wages – in September the government contribution falls to 70% (so employers need to pay the additional 10%); in October the government contribution falls to 60% and the scheme closes on 31 October.

Employers need to agree the new flexible furlough arrangement with the employee.

The flexible agreement can last any amount of time and can be agreed more than once.  The minimum period it is possible to claim for is 7 calendar days.

Employers should keep a written record of the agreement for 5 years and keep records of how many hours their employees work and the number of hours they are furloughed. 

The employer must pay normal wages for the hours worked by a flexibly furloughed employee.

Employers have until 31 July to make claims for periods up to 30 June.

Claims starting before 1 July must end on or before 30 June. Where a furlough period straddles June and July a separate claim will need to be submitted to cover up the period up to 30 June and the days in July.

Claim periods on or after 1 July must start and end within the same calendar month and must last at least 7 days unless the employer is claiming for the first few days or last few days in a month.

When the Scheme ends, the employer will need to assess at that point whether to bring the employee back to work to their full hours or, depending on the circumstances, make them redundant. Grants cannot be used to subsidise redundancy payments.