Everything you need to know about the government's flexible furlough scheme
The UK government’s Coronavirus Job Retention Scheme (CJRS) was first introduced in March 2020 to protect jobs during the pandemic.
The scheme has provided grants to businesses affected by COVID-19 so they can keep non-working employees on the payroll instead of laying them off.
From July 2020, the scheme was extended to include a flexible furlough option, which allows employees to work part-time while still receiving government support.
The latest government figures show that in November there were 1.37 million employees under flexible furlough, which makes up roughly a third of the total number of furloughed employments in the UK. The CJRS is expected to remain in place until 30 September 2021.
Read on for more details on what the flexible furlough entails, including who is eligible for the scheme and what business benefits the flexible furlough option offers.
Who is eligible?
The CJRS is no longer limited to employees who have been furloughed before, and there’s no cap on the number of employees an employer can claim for. Workers on all employment contract types from full time to zero hours are eligible, as are foreign nationals.
The two basic requirements are that the employee you want to claim for must have been on the PAYE payroll on 30 October 2020 (or was made redundant before then and has since been re-employed) and that your reason for furloughing them is a direct result of the Coronavirus.
The official government website explains how special circumstances like taking time off because of sickness and working for multiple employers may affect claims.
How much you can claim?
Under full furlough, the Government CJRS grant pays 80% of an employee’s wages up to a cap of £2,500 per month.
Under the flexible furlough arrangement, the percentage is the same, but the cap is proportional to the hours the employee is off work. Therefore, an employee who is furloughed for half of their normal hours can receive 80% of their wages up to a cap of £1,250 per month.
The employer remains responsible for paying the employee’s wages for the hours they work, and under both schemes, the employer is also responsible for covering employer NICs and auto-enrolment pension contributions.
Calculating the claim amount
For employees on flexible furlough, employers need to calculate how many hours their employees spend furloughed during each claim period.
To work this out, you need to take each employee’s “usual hours” and subtract the number of hours they have worked.
For employees that used to be on a fixed-hour contract, their usual hours are the hours they were contracted to work on or prior to 19 March 2020. For employees that used to work variable hours, you need to look at the average number of hours they worked either in the 2019-2020 tax year or the corresponding calendar period in the 2019-2020 tax year, whichever is higher.
This calculation must be included when submitting a claim, alongside details of the claim period, the amount claimed for each employee and the reference number of the claim. The official CJRS website has a calculator to help businesses with this.
Keeping accurate records is essential to avoid over- or under-claiming.
Consider using a shift scheduling solution to have access to a reliable record of employee hours whenever you need it. A good shift scheduling tool also makes it easier to manage your business’s fluctuating workload on a week by week basis and empowers your furloughed employees to be more proactive in managing their own work schedules.
The benefits of the flexible furlough scheme
The main benefit of the part-time furlough option is that it gives businesses the flexibility to bring employees back to work for as many or as few hours as needed each week.
It also gives employers the option to give all their employees part-time hours instead of having to decide who to keep at work.
From an employee’s point of view, flexible furlough can be a much fairer system for distributing hours and is a good way to help employees who’ve been off for a long time to adjust back to work life.
In a case study, one transport company noted that their employees were more involved with the business and felt more connected to their workplace when given the chance to work part-time hours.
The flexible furlough option has been a welcome addition to the Coronavirus Job Retention Scheme. Visiting the official summary page for the CJRT is a good place to start if you’re interested in making a claim.