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The Inflexibilities of Flexible Furlough

This month saw the introduction of Flexible Furlough, giving employers the ability to bring employees back to work on a part-time basis and continue to claim under the Coronavirus Job Retention Scheme for any normal hours not worked.

This is a complex scheme and is one of the many challenges that face businesses as they return to some of their pre-Covid activities after lockdown.

The calculations are far from straightforward. If an employee is flexibly furloughed, their usual hours will need to be worked out and a record must be kept of the actual hours they work as well as their furloughed hours for each claim period. The calculations for working out usual hours will differ depending on whether the employee works fixed or variable hours.

An employee can only be put on flexible furlough if they have previously been furloughed for at least three weeks by 30 June.  However, there are certain circumstances in which workers can be placed on furlough for the first time after 10 June, for example if they are returning to work after family leave.

Flexible furlough arrangements must be agreed in writing and the hours of work should be set out clearly, along with the amount they will be paid for hours worked and the furloughed hours during each week and shift pattern. The employer will be expected to meet the cost of hours work, whereas furloughed hours can be claimed for under the CJRS scheme.

Employers cannot furlough more staff members than the maximum number claimed for under any previous claim prior to 30 June, which may be an issue for companies that have used furlough on rotation.

There are more changes ahead. From 1 August employers will take over responsibility for paying employer NICs and pension contributions for furloughed staff. From 1 September the government’s contribution will reduce, with a further reduction from 1 October.

As it stands, the CJRS is set to end on 31 October. Read more in our article The End of (Furlough) Days.