Important Changes to Furlough Leave from June 2020

June 2020 To be eligible for Furlough going forward you need to be on Furlough Leave at 10 June 2020, i.e. three weeks prior to 30 June (this is unclear and direction is awaited). The UK Government had previously announced that the main features of the Furlough Scheme would continue unchanged until the end of July 2020, i.e. the Government would continue to pay 80% of an individual’s wages up to a maximum cap of £2,500 per month together with national insurance costs and mandatory pension contributions on that salary.
From 1 July 2020 – Introduction of the Flexible Furlough Scheme (FFS)!! Both parties can agree any level of part-time working without the employee coming off the Furlough Scheme completely. However, it is important to appreciate that the employer will be solely responsible for salary payments in respect of the periods in which the employee is working directly for the employer. The employer will be able to make a claim for a furlough period of one week, rather than three.
It follows from the timetabling and from what we said about the time limits introduced to the Furlough Scheme above, that the scope for agreeing flexible working only applies to employees who have previously been furloughed before 10 June. We have been promised further guidance on this and the calculation of claims for employees who are going to be working flexibly whilst remaining on furlough, by 12 June.
What happens if the employee disputes the part-time work offered? Much would depend on the particular facts. However, unless an employee has a legitimate reason for refusing to return to work (e.g. the individual is shielding), our view is that employers are likely to be able to instruct individuals to return to work on a part-time basis.
The Chancellor in his speech said:
From 1 July 2020, employers will have the maximum possible flexibility to decide on the right arrangements for them and their furloughed staff. For instance, if you are watching at home and on furlough, your employer could bring you back two days a week. They would pay you for those two days as normal, while the furlough scheme will continue to cover you for the other three working days.”
It is unclear whether high earners who have been receiving the capped £2,500 would be paying a fraction of the £2,500 based on the amount of days they were Furloughed.
From 1 August 2020, the Government will no longer make any contribution to employer National Insurance and Pension contributions, the employer will need to pay this.
From 1 September 2020, the Government will thereafter reduce the amount of the Furlough Scheme grant to 70% of the employee’s wages up to a maximum of £2,187.50 per month and the employer will be required to top up the additional 10%, plus paying employer’s NIC’s and pension contributions.
In October, the employer must contribute 20% of the employee’s salary, i.e. up to £625 and the Government grant goes down to 60% of the normal wages salary, i.e. .up to a maximum of £1,875 per employee.
On 30 October 2020 the Job Retention Scheme ends.

Other news
The Government has announced that the Self-Employment Income Support Scheme is also going to be extended. There have been roughly 2.3 million claims under this Scheme as at 24 May. This Scheme, which allows individuals to put in a claim worth 80% of their average monthly trading profits covering three months’ worth of profit and capped at £7,500 in total, is going to be amended. It will be payable to the same category of eligible individuals, but instead it is only going to be worth 70% of the average monthly trading profits and will be capped at £6,570 in total.

Our clients: