15 June 2020

On 12 June HMRC published further updates to the official guidance on the Coronavirus Job Retention Scheme (CJRS), including details of the flexible furlough scheme, which commences on 1 July 2020. We provide a link below to the guidance:

https://www.gov.uk/government/collections/coronavirus-job-retention-scheme

Under the ‘flexible furlough’ scheme, employees no longer need to avoid doing any work for the employer, but can work for some of the week and be furloughed for the rest, in proportions decided between employee and employer. Employers will have to pay employees in full for hours worked with CJRS grants remaining available for normal hours not worked. This means employers will claim a pro rata amount of 80% of salary, based on the proportion of hours not worked out of normal working hours.

The normal working hours for those with fixed hours/pay, is calculated by reference to the number of hours worked in the pay period before 19 March 2020. To calculate the normal working hours for those with variable pay, employers will use the higher of (a) the average number of hours worked in the tax year 2019 to 2020; or (b) the corresponding calendar period in the tax year 2019 to 2020.

Here is a link to one of HMRC's worked examples of how to calculate furlough for a flexibly furloughed employee.

The updated guidance also confirms:

• The minimum three-week period for furlough is removed (as of 1 July 2020). There is therefore no minimum period of furlough, albeit any claim through the CJRS portal must be in respect of a minimum one-week period (i.e. employers can only put in four claims a month, not 31);
   
• The 10 June cut-off for furloughing employees will not apply to these returning from family-related leave (such as maternity, adoption, paternity, shared parental or parental bereavement leave). Such employees will still be eligible for the furlough scheme even if they have not previously been furloughed by 10 June, provided the employer has used the furlough scheme for other eligible employees by that date; and
  
  
• Employers will be required to ‘keep a new written agreement’ when implementing flexible furlough.

A new guidance document has also been issued which provides a useful summary of how the CJRS will be tapered between now and the end of October 2020 . By way of reminder:

• From 1 August, employers will have to pay employer NI contributions and employer pension contributions, with the CJRS continuing to pay 80% of wages up to a cap of £2,500.
  
  
• From 1 September, in addition to paying employer NI contributions and employer pension contributions, employers will also have to pay 10% of wages with the CJRS paying 70% (capped at £2,187.50); and
  
  
• From 1 October, in addition to paying employer NI contributions and employer pension contributions, employers will also have to pay 20% of wages with the CJRS paying 60% (capped at £1,875).

Please contact a member of the Employment Team should you require any assistance in relation to the CJRS or any other employment issue arising.

This update contains general information only and does not constitute legal or other professional advice.

Employment law

Caroline Carr, Partner: E: cac@bto.co.uk / T: 0141 225 5263
Laura Salmond, Partner: E: lis@bto.co.uk / T: 0141 225 5313
Douglas Strang, Senior Associate: E: dst@bto.co.uk / T: 0141 225 5271