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How Will the Flexible Furlough Scheme Work?

on Friday, 26 June 2020.

There has been limited use of the Government's Job Retention Scheme in the Higher Education sector, but it has been of particular relevance to staff employed in universities' commercial undertakings.

The Government released detailed guidance earlier this month on the new flexible furlough scheme (New Scheme), which will be introduced from 1 July 2020.

The new guidance provides clarity on the main workings of the New Scheme and addresses some previously unanswered questions.

What Did We Already Know About the New Scheme?

We already knew that:

  • flexible furloughing would be introduced from 1 July 2020, so from this date employees can work part-time whilst furloughed, something that is prohibited under the current scheme
  • from 1 August 2020, employers will be required to contribute to the cost of the New Scheme, starting with paying employer's pension and National Insurance contributions in August
  • 10 June 2020 was the cut-off date for furloughing an employee for the first time, in order to allow the currently required 21 day furlough period to be completed by 30 June
  • from 1 July 2020, employers will be limited to furloughing no more than the maximum number of staff furloughed under the current scheme

What Additional Detail Does the New Guidance Reveal?

The new guidance confirms that:

  • from 1 July 2020, the current three week minimum furlough period will be removed. There will be no minimum furlough period from July onwards, although for the purposes of claiming though the portal, employers will be limited to making one claim per week
  • 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
  • where an employee was on statutory family leave (such as maternity or paternity leave) on 10 June 2020, they can be furloughed for the first time after the usual cut-off date, as long as their employer had used the current scheme in respect of other staff by 10 June 2020

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Calculating Pay For Part-Time Staff On Flexible Furlough

The updated guidance contains several worked calculations to show how pay should be calculated under the New Scheme, 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 New Scheme for time spent furloughed
  • the usual caps will continue to apply
  • from 1 August 2020 until the New Scheme closes on 31 October 2020, the Government grant will reduce as employer contributions increase
  • 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% of normal pay subject to the £2,500 cap.

If you require advice relating to the updated furlough scheme, please contact Jane Byford in our Higher Education Team on 07909 656 764, or complete the form below.

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