Flexible furlough scheme begins
Dun dun dun! It’s been another wild week in the world of Covid-19. The lockdown has pretty much been announced as over as the daily press conferences have stopped, the numbers are dropping and from Saturday 4th July pubs will reopen across England and we will all be free to drive to Barnard Castle to test our eyesight.
In tandem with all these new developments we are now moving to the second stage of the Coronavirus Job retention Scheme (CJRS), aptly renamed CJRS V2. As of today, 1st July, millions of furloughed workers in the UK can return to work part-time.
The first big change that will happen with V2 of the CJRS is that the grant is only available to employers who have previously made claims for support and to employees who were originally furloughed under the first version of the CJRS for at least 3 weeks. This means that no new employees can be added unless they were furloughed before and employers cannot claim unless they have made (or will be making) a claim for the period to 30th June.
The second big change is obviously the part-time working (or flexible furlough). If employees have been furloughed any time during the last 3 months then they are eligible to return to work part-time which is a change from the first round of furlough where employees weren’t allowed to work at all and were furloughed for a minimum of three weeks at a time.
Under the new rules employers can claim for any amount of time that the employee is not working and claims must be made in weekly blocks. This means that whatever hours an employee works can change on a weekly basis so they can pick up or drop hours depending on demand. Whatever hours not worked under your normal contractual hours will be paid for by the government via CJRS V2.
The government will still cover 80% of a worker’s salary up to £2,500 a month for July and August, but from September onwards, employers will need to start contributing towards the employee’s pay. You can find more information about the furlough timeline here.
This all sounds great, is there a catch? Of course there is! The main concern now for employers and employees alike is how the bloomin’ heck do you calculate what will be paid under flexible furlough if the hours change every week?
There are two different calculations to consider when calculating your employee’s usual hours, depending on whether they work fixed or variable hours. The calculations are quite complex and unfortunately I don’t have a PhD in Maths, but HMRC has provided comprehensive guidance to follow when determining an employee’s 'usual hours' for the purpose of your CJRS claim, which can be accessed here. They also have a handy free calculator which will tell you how much you can claim for each member of furouged staff.
For BrightPay users, the payroll software has been updated in line with CJRS V2, including support for flexible furlough (i.e. when employees return to work part-time with reduced pay), and claim periods from 1 July onwards. Book a demo today to discover how BrightPay is catering for this new phase of CJRS.
And for employees, you can use the trusty Salary Calculator which will tell you what your weekly take-home pay will be once you enter some basic information.
So there you have it! Hopefully the next stage goes nice and smooth, both furlough and life in general. If anything, at least we can now have a nice pint or glass of wine in the pub to drown our sorrows. I’m starting right now - it’s 5 o’clock somewhere right?
Interested in finding out more about the new changes to the Coronavirus Job Retention Scheme? Watch our webinar on-demand where we discuss flexible furlough, the wind-down of the scheme and changes to making a CJRS claim.
Written by Aoibheann Byrne
BrightPay Payroll Software