Furlough update: a more flexible scheme from 1 July
Fiona Hamor

The Government has announced more detail about how the Coronavirus Job Retention Scheme will operate from 1 July.

The scheme closes to new entrants from 30 June – from 1 July onwards employers will only be able to furlough employees who have already been furloughed for a full three week period prior to 30 June.  It follows that the cut-off date for furloughing someone for the first time is 10 June. Employers have until 31 July to make a claim for the period up to 30 June.

Under the revised scheme from 1 July onwards:

  • Claims can be made for a minimum period of 1 week but the claim period cannot overlap calendar months.
  • Employees can come back to work for any amount of time and any shift pattern, and employers will be able to agree any working arrangements with previously furloughed employees whilst still being able to claim under the scheme for hours not worked.  Hours not worked will be calculated by reference to the hours usually worked in the role.
  • As currently, any new furlough arrangement must be agreed with employees and employers must confirm that agreement in writing.
  • The level of Government contribution will taper from 1 August.  In August employers will have to pay employer NI and pension contributions for wages claimed under the scheme.  In September employers will also have to pay 10% of wages to make up the current 80% payment to employees, and in October the employer contribution will increase to 20% of wages.
  • The cap of £2,500 per month will remain in place but will be proportional to the hours not worked, i.e. if an employee works 50% of their normal hours over the course of a month, the cap on wages claimed under the furlough scheme for their hours not worked will be £1,250.

Further guidance on flexible furloughing and how employers should calculate claims will be published by the Government on 12 June.

If you would like advice on any of the issues raised above or assistance with drafting a revised furlough agreement, please do not hesitate to get in touch with us.

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