10 Changes to the coronavirus job retention scheme from 1 July 2020

Back in May, the Chancellor announced that the Coronavirus Job Retention Scheme would be extended until 31 October 2020 but, from 1 July, employers will be able to bring their employees and workers back on a part time basis whilst still being able to make a furlough claim. The Chancellor also announced that, from 1 August 2020, employers will have to contribute to the costs of their furloughed employees.

What are the changes?

1. Only employees who have previously been furloughed for at least three consecutive weeks at any time between 1 March and 30 June 2020 can be included in a grant claim from 1 July onwards. This means employees must have been furloughed by at least 10 June to be eligible for the grant claim from 1 July.
   
   However, employees returning to work from statutory leave (such as maternity leave) after 10 June may be furloughed if certain criteria are met.
2. Where a previously furloughed employee started a new furlough period before 1 July this furlough period had to be for a minimum of three consecutive weeks. This is the case regardless of whether the three consecutive week minimum period ends before or after 1 July.
   
   For example, a previously furloughed employee can start a new furlough period on 22 June, which would have to continue for at least three consecutive weeks ending on or after 12 July. After this the employee can then be flexibly furloughed for any period.
   
   However, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a separate claim for the period up to 30 June.
3. Friday 31 July is the last day that employers can submit claims for periods ending on or before 30 June.
4. From 1 July, employers cannot make a claim for any more employees than they claimed for in any claim made between 1 March and 30 June 2020.
   
   For example, where an employer who had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees, the maximum number of employees that employer could furlough (and claim for) in any single claim starting on or after 1 July would be 50.
   
   Employees returning to work from statutory leave after 10 June, who may be furloughed if certain criteria are met, are additional to this cap.
5. Employees can be brought back to work for any amount of time and any work pattern, and the employer can still make a claim in respect of the proportion of the employee’s usual hours that they are not working. This is called flexible furloughing.
6. Employers can still fully furlough employees for all of their usual working hours.
7. If an employer flexibly furloughs employees, they will need to agree this with the employee (or reach collective agreement with a recognised trade union) and keep the new written agreement that confirms the new furlough arrangement. The agreement can last any amount of time and can be changed from time to time (with the employee’s agreement).
8. During hours which the employer records its employee as being on furlough, it cannot ask its employee to do any work for it that:
   • makes money for the employer organisation or any organisation linked or associated with it; or
   • provides services for the employer organisation or any organisation linked or associated with it.
   Until the new Treasury Direction is published, employers should interpret this to mean that the employee must not do any work.
9. If an employee is flexibly furloughed, the employer will need to work out the employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period. There are two different calculations an employer can use to work out an employee’s usual hours, depending on whether they work fixed or variable hours.
10. Employers must keep records of how many hours their employees are actually working and the number of hours they are furloughed (ie not working).

What contribution will employers need to make?

If you need any help with your flexible furloughing arrangements or documentation, please speak to Charlie Barnes.