(Correct as of 13th June 2020)
Main Principles
Prior to 1 July 2020, employees on furlough could not undertake any work for you other than training.
From 1 July, you will be able to:
- claim for employees who have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June
- flexibly furlough employees – this means you can bring your employees back to work for any amount of time, and any work pattern
- claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.
- claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days.
- alternatively, you can continue to fully furlough employees if you wish.
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.
From 1 July, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.
All furlough periods before 1 July must be for a minimum of 3 consecutive weeks in order to be eligible for the rebate.
Employees you can claim for
You can only claim for furloughed employees that were employed on 19 March 2020 and who were on your PAYE payroll on or before 19 March 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.
From 1 July, only employees that you have successfully claimed a previous Coronavirus Job Retention Scheme grant for will be eligible for further grants under the scheme. This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.
Employers will have until 31 July to make any claims for claim periods up to 30 June.
The number of employees you can claim for in any claim period starting from 1 July 2020 cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June 2020. One caveat is if you have employees that you are furloughing for the first time due to them returning from certain types of parental leave.
Claim period
Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days.
You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.
Where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps in between the dates.
When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours, they will have worked during the claim period.
Requirement for agreement to furlough
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed. You must:
- make sure that the agreement is consistent with employment, equality and discrimination laws
- keep a written record of the agreement for five years
- keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working)
- the employee does not have to provide a written response and you do not need to place all your employees on furlough.
- when your employees are on furlough
During hours which you record your employee as being on furlough, you cannot ask your employer to do any work for you that:
- makes money for your organisation or any organisation linked or associated with your organisation
- provides services for your organisation or any organisation linked or associated with your organisation.
- your employee can:
- take part in training
- volunteer for another employer or organisation
- work for another employer (if contractually allowed)
Holiday pay
Furloughed employees continue to accrue leave as per their employment contract.
Employees can take holiday whilst on furlough, but this must be paid at 100%
Employees returning from family-related statutory leave
Family-related statutory leave includes maternity, paternity, shared parental, adoption, parental bereavement, and unpaid parental leave.
The pay for those returning from these types of leave should be calculated against their salary, before tax, not the pay they received whilst on family-related statutory leave.
Employees returning to work after being on sick pay
The pay for those returning from these types of leave should be calculated against their salary, before tax, not the pay they received whilst on this type of leave.
Work out your employee’s usual hours and furloughed hours
If your employee is fully furloughed, you do not need to work out their usual and furloughed hours as you will just be claiming their contracted hours.
If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period.
Find examples of how to work out the claim amounts here
Calculating the number of working and furloughed hours for each employee
You will have agreed how many hours your flexibly furloughed employee is going to work in the claim period. They will be furloughed for the rest of their usual hours. You will then only claim for the hours they were furloughed in that period and not the hours worked.
You must pay the employee their contractually agreed rate for any hours they work.
If your employees are working reduced hours
For claim periods up to 30 June if an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme.
Employees who are shielding
Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed. As long as they meet the requirements of eligibility from July 1st.
If your employee has caring responsibilities
Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. As long as they meet the requirements of eligibility from July 1st.
If your employee becomes sick while furloughed
Furloughed employees retain their statutory rights, including their right to Statutory Sick Pay. This means that furloughed employees who become ill, due to Coronavirus or any other cause, must be paid at least Statutory Sick Pay. Subject to eligibility this includes those self-isolating or shielding because of Coronavirus. It is up to employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate.
If a furloughed employee who becomes sick is moved onto SSP, employers can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP if the sickness is related to coronavirus.
The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness.
When the government ends the scheme
When the scheme closes on October 31, you must decide, depending on your circumstances, as to whether employees can return to their normal hours. If not, it may be necessary to consider reducing their hours, or a termination of employment (redundancy). Normal redundancy rules apply to furloughed employees.
For more information on the CJRS scheme and the changes from July 1st 2020 click here.