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CIPD Coronavirus webinar series
Flexible furlough: the next steps
19 June 2020
Welcome
Katie Jacobs, Senior Stakeholder Lead, CIPD
Katie Jacobs
Senior Stakeholder
Lead, CIPD
Ben Willmott
Head of Public
Policy, CIPD
Today’s speakers
Andrew Willis
Head of Legal &
Advisory,
HR-inform
Alastair
Swindlehurst
Owner,
Swindlehurst
Consulting
#StrongerWithCIPD
cipd.co.uk/memberbenefits
Covid-19 resources
NEW Well-being helpline
Employment Law helpline
Communities and branches
People Management
Knowledge and content
Free learning Careers support
Professional creditability
Financial support
Context
Ben Willmott, Head of Public Policy, CIPD
Changes to furlough scheme
June
The final date by which an employer could furlough an employee for the first time was 10June. Scheme closes for new entrants on 30 June.
July
Employers can start bringing furloughed staff back to work gradually on reduced hours. Government continues to pay 80% of furloughed staff’s wages
August
Government pays 80% of wages up to £2,500 cap but employers have to start paying National Insurance and pension contributions
September
Government pays £70% of furloughed staff’s wages up to £2,190 cap
October
Government pays 60% of furloughed staff wages up to £1,875 cap
Flexible furlough
considerations
• Employers should:
• Involve employees (or union representatives).
• Agree flexible working hours or patterns and keep agreements and records.
• Select who will be flexibly furloughed, avoiding all forms of discrimination especially sex, age and disability.
• Inform relevant employees that they are on flexible furlough and keep a written record that confirms the flexible furlough arrangement.
• Decide on the length of the claim period, what to include when calculating wages and employees’ usual hours and furloughed hours.
• Plan for what will happen when the furlough scheme ends on 31 October.
Legal insight
Andrew Willis, Head of Legal & Advisory, HR-inform
| 9
Furlough scheme will now run until the end of October:
• the Government will continue to reimburse 80% of furloughed workers’ normal wage costs (up to £2,500 per month plus NI and (capped) pension contributions) until the end of July
• from 1 August employers will be required to contribute to the “wage costs” covered under the scheme – covered in next slide
• from 1 July employers can start to bring back previously furloughed staff on a part-time basis and claim reimbursement of wage costs for the time spent not working (caps pro-rated) –note need for new agreement
• employees cannot be furloughed for the first time after 10 June – unless returning from family leave (e.g. paternity leave / maternity leave) or military service (reservists) and other staff previously furloughed
• note position re subsequent furlough periods commencing after 10 June
Extension of furlough scheme
| 10
Reimbursement amounts taper off from 1 August:
• from 1 August employers will have to pay employer’s NI contributions and pension contributions on all salary paid and will not be able to reclaim any part of them
• from 1 September the Government will only reimburse 70% of normal salary (up to a maximum of £2,187.50) – the employee must receive at least 80% of their normal salary so the employer will have to pay 10%
• from 1 October the Government will only reimburse 60% of normal salary (up to a maximum of £1,875.00) – again the employee must receive at least 80% of their normal salary so the employer will have to pay 20%
• Note that the above caps are pro-rated to reflect furloughed hours v working hours – e.g. in August the monthly cap will be £1,500 for an employee furloughed for three days in a normal five-day week
Extension of furlough scheme, cont.
| 11
Placing employees on ‘flexible furlough’ will require a new agreement between employer and employee:
• new agreement needed as any current agreement will (or should) prohibit employees from carrying out any work during furlough
• keep a written record of the agreement for five years
The latest guidance states that employers must have confirmed to their employees (or reached collective agreement with a trade union) in writing that they have been furloughed:
• the new agreement should permit the employee to work during furlough and set out the circumstances in which the employer can require this
• the employer should keep records of how many hours their employees work and the number of hours they are furloughed (i.e. not working) – and keep for six years
Furlough – continuing need for agreement
| 12
Furloughed hours v working hours:
• if your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period
• where the employee’s working hours are fixed, or their pay does not vary with the amount of hours worked, the reference period for calculating their hours is the hours they were contracted for at the end of the last pay period ending on or before 19 March 2020
• where the employee works variable hours, you will need to use the higher of (1) the average number of hours worked in the tax year 2019 to 2020 and (2) the corresponding calendar period in the tax year 2019 to 2020
Calculating working hours
| 13
New rules around claims:
• when claiming for employees who are flexibly furloughed, employers should not claim until they are sure of the exact number of hours the employee will have worked during the claim period
• potentially presents difficulties re claims submitted in advance of payroll dates
• employers may furlough different groups and numbers of employees at different times, but an employer can only make one claim during a claim period for each PAYE scheme it operates
• also, number of employees claimed for in any claim period cannot exceed the number claimed for in any one claim ending on or before 30 June
Furlough – claims, claim periods
| 14
New rules around claim periods:
• the deadline for employers to claim under the CJRS for the period to 30 June 2020 is 31 July 2020
• claims can be made in relation to flexible furlough from 1 July 2020
• for the period from 1 July, claim periods will no longer be able to overlap months, i.e. you will not be able to claim for part of July and part of August in one claim – this is necessary as the scheme will change monthly
• minimum claim period of seven days will apply (note the distinction between “claim periods” and “furlough periods” –no minimum period of flexible furlough)
Furlough – claims, claim periods, cont.
Insight
Alastair Swindlehurst, Owner, Swindlehurst Consulting
SwindlehurstConsultingLtd.com
REFLECTIONS
• Plan your requirements and budget.
• Deferred PAYE & HMRC demands.
• Plans can change - understand what works and potential flex.
• Drive the communication for everyone.
• Engagement to maintain goodwill.
• Statutory processes still apply.
• No Covid Card!
Questions
Please use the Q&A function to submit your questions
Please submit your questions for:
• Ben Willmott, Head of Public Policy, CIPD
• Andrew Willis, Head of Legal & Advisory, HR-inform
• Alastair Swindlehurst, Owner, Swindlehurst Consulting
#StrongerWithCIPD
cipd.co.uk/memberbenefits
Covid-19 resources
NEW Well-being helpline
Employment Law helpline
Communities and branches
People Management
Knowledge and content
Free learning Careers support
Professional creditability
Financial support
*New* Well-being Resources
• The resource provides:• Legal information
• Debt and financial information
• Manager consultancy and support
• Information on work and home issues
• Factsheets, advice, information and self-help tools
• Links to specialist support organisations
• A resources area with; programmes, videos, webinars, medical information and mini health checks.
• We’ve partnered with Health Assured to support members mental health and well-being
• Unlimited free 24/7 confidential telephone helpline, online portal & Health e-Hub app
Further information
NEW well-being helpline for CIPD members
CIPD coronavirus hub
CIPD community
Gov.uk/coronavirus
