From today, 1st July 2020, employees who have completed three continuous weeks of furlough by or before 30 June 2020 can be flexibly furloughed on any working pattern. Employers must pay them for any hours worked and may then claim the furlough grant for the hours the employee is furloughed up to the existing capped 80% pay limit, calculated pro rata based on the proportion of usual working time spent on furlough.
While there is no minimum amount of time the flexible agreement must last for, employers will only be able to claim for periods of at least seven calendar days. If the employer wishes to implement a flexible furlough agreement, they must agree this with the employee in writing and retain a record of this agreement for six years. The employer must also keep a record of the hours the employee works and the hours for which they are furloughed for six years.
In line with these changes, the government has further updated its Furlough Scheme guidance, adding new information on holiday pay for flexibly furloughed employees. The guidance now states that if employees are flexibly furloughed then any hours taken as holiday during the claim period can be counted as furloughed hours rather than working hours. However, employers should not put employees on furlough for a period just because they are on holiday. Employers will be obliged to pay the additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need.
The government has also published details of how employers can pay all or some of their grant back if they have overclaimed through the furlough scheme. Employers can either make a payment directly to HMRC or correct it in their next claim.
Finally, the Future Fund, which provides government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors, has been further expanded to include companies incorporated in the UK, but who have headquarters overseas. However, to be eligible at least 50% of staff must be based in the UK and 50% of revenues from UK sales.
Our podcast on this update can be found here [ Flexible Furlough Starts Today ]