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What Do Charities Need to Know About Flexible Furlough?

on Thursday, 09 July 2020.

Following the Chancellor of the Exchequer's Spring Budget announcement on 3 March 2021 that the Coronavirus Job Retention Scheme ("CJRS") will be extended until 30 September 2021, we have updated our article on flexible furlough guidance below.

The extension of the CJRS until 30 September 2021 includes the ability of charities to put workers on flexible furlough. The introduction of flexible furlough working was previously reported on and the significant changes in relation to this following the latest extension to the CJRS are outlined below.

Employees Who Can Be Flexibly Furloughed

We already knew that:

  • Flexible furlough started on 1 July 2020, meaning from this date employees could work part-time whilst furloughed, something that was prohibited under the initial CJRS scheme.
  • Charities are free to agree with their employees what hours and shift patterns they will work on their return.
  • The charity will be responsible for paying wages in respect of the hours that their employees work and a claim can be made against CJRS, on a pro-rata basis, in relation to the hours that they are not working.
  • Flexible furlough agreements can last any amount of time and employees can be flexibly furloughed more than once. In practical terms, this means employers can continue to rotate staff between furloughed and working status, if desired.

Previously, an employer could only claim for employees for whom they had made a PAYE real time information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020.

For claims made after 1 May 2021 however, employees on any type of contract who were added to the payroll on or after 1 November 2020 and who were employed on 2 March 2021, can now be put on full-time or flexible furlough so long as the employer has made a PAYE RTI submission for them between 20 March 2020 and 2 March 2021.

Increased Employer Contributions

Employer contributions are set to increase from 1 July 2021 for both fully furloughed and flexibly furloughed employees:

  • Until 30 June 2021, employers can claim 80% of an employee's usual salary for hours not worked up to a maximum of £2,500 per month. Employers are still required to cover National Insurance (NI) and employer pension contributions and employers can decide on whether to top up an employee's wage.
  • However, from 1 July 2021, employers will be expected to contribute 10% of an employee's wages which will increase to 20% in August and September before the CJRS is due to end. This is in addition to the NI and pension contributions and the option to top an employee's wages up.

Calculating Pay for Part-Time Staff on Flexible Furlough

The flexible furlough guidance contains several worked calculations to show how to calculate the amount employers should claim for an employee who is flexibly furloughed, depending on the individual's particular circumstances.

  • Broadly, it will be necessary to calculate the employee's usual working hours and then work out, as a proportion of these, their hours spent furloughed and their hours spent working.
  • The calculations employers will be required to carry out will differ depending on whether the employee usually works fixed or variable hours.
  • Staff should be paid in full for any hours they work whilst flexibly furloughed and the employer will be responsible for paying this element themselves.
  • The employer will then be permitted to claim under the CJRS for time spent furloughed.
  • The usual caps will continue to apply.
  • There continues to be no obligation on employers to top staff up to full pay in respect of the period of time they spend furloughed, so furloughed staff will continue to be entitled to 80% until 30 June 2021 of normal pay subject to the £2,500 cap.
  • From 1 July 2021, a further step will be required for employers to calculate furlough pay, in response to grant contributions to furlough pay reducing by 10% in July and 20% in August and September before the CJRS is due to end.

Job Retention Bonus Withdrawn

The Job Retention Bonus which was due to be available between 15 February 2021 and 31 March 2021 has been withdrawn. The bonus was due to be a one-off payment of £1,000 to UK employers payable in respect of every furloughed employee who remains continuously employed by them through to the end of January 2021. It has been axed in light of the extension of the CJRS until 30 September 2021 with the UK Government stating that it will instead redeploy a retention incentive at the right time.


For more information or to discuss your charity's position, please contact Joanne Oliver in our Charities team on 07909 547537, or complete the form below.

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