Furlough has been a newly implemented support system for employers and employees to remain employed without extra impact on the business, and without feeling a need to fire employees due to the Covid-19 impact on companies. The government has announced that changes will have to be made to the scheme, as the lockdown starts to lift, and employers need to provide more support and start the return to work process over the coming months.
The Job Retention Scheme was created to help business owners throughout the lockdown, so that employees who could not work due to the outbreak would still have 80% of their income paid by the government, with the option to "top up" the salary by the employer. This scheme was to help ease the drastic downturn of business for companies throughout the UK, who felt that they may have to make employees redundant due their jobs being impossible to do during the lockdown.Employees who were previously furloughed for three weeks prior to 30th June can continue to be part of the scheme, but if they were not put on furlough before this date, they cannot be put on Furlough thereafter. Employees do not need to be on Furlough on the 30th June to be part of the extended scheme, they can work at the end of June and be re-furloughed as long as they have been Furloughed before, and companies who have used the scheme cannot exceed the number previously claimed for.If a company has not used the scheme, they cannot now add employees to the scheme. However, if an employee has returned from maternity or other family leave, they can be added to the Furlough scheme, but this is the only exception to the "no new Furloughs" rule.
There will be new changes made from 1st July 2020, and they are:
It will be possible to permit employees to work for some or part days, and be Furlough for others from 1st July, with the cap on the Furlough grant being proportional to the hours not worked.Any working pattern will be permitted under the Flexible Furlough Scheme, with no restriction on the length of time that it must last, but if you wish to agree a flexible Furlough arrangement, you must create a new agreement with your employee to sign.If you are choosing to start Flexible Furlough, you will have to have additional record keeping, with a requirement of keeping the records for 6 years of the usual hours worked by each employee and the actual hours worked. HMRC will potentially retain the right to inspect Furlough records during this period to satisfy that the companies have operated with the scheme correctly.HMRC will also have the right to take back any payments that have been made because of incorrect or illeagal practices. You are required to calculate a baseline number of usual hours in order that these can be compared with actual hours worked, and this will then be used to help calculate the grant permitted for Flexi Furloughed workers. Luckily, there is a mechanism where you can correct a claim if you have discovered an error with the exact number of hours an employee has worked and would have worked during the claim period.It is essential that, as an employer, you understand the requirements of the scheme, and decide if employees can start to return to work under the flexible Furlough scheme, and set in place the new agreements and the record-keeping requirements prior to the 1st July 2020 deadline. This does mean a lot more work on the calculation and legal side, but will ensure that you can start to have employees return to work safely.
