Flexible Furlough Scheme (FFS)


The latest updates to the Government’s Coronavirus Job Retention Scheme (“CJRS”) Guidance were published on 12 June 2020.

The changes are extensive and relate to the “new version” of the CJRS that applies from 1 July until 31 October 2020 (see our short summary here). Employers need to be aware that, with effect from 1 July 2020, previously furloughed employees can return to work on a flexible part-time basis while employers continue to claim for a proportion of their wages through the CJRS. Employers must meet the same eligibility requirements as applied under the “original” CJRS.

Who can be furloughed from 1 July 2020

From 1 July 2020, CJRS grants will only be available in respect of employees who have previously been furloughed under the scheme for a period of at least three weeks ending on or before 30 June. One exception to this deadline is for employees returning from statutory parental leave who may be furloughed after that date for the first time in certain circumstances.

It is important to note that, from 1 July 2020, the number of employees an employer is able to claim for cannot exceed the maximum number of employees that were claimed for in a single claim period prior to 30 June 2020 (although this number may be increased to reflect any relevant employees being furloughed for the first time following a return from parental leave). This will be particularly important for any employer who has operated a “furlough rotation” to manage a reduced workload, with two or more groups of staff taking it in turs to be furloughed for a period and then return to work. The result will be that not all of the employees that have been furloughed to date will be able to participate in “part-time furlough” at the same time.

The requirement that the employer must have submitted a RTI report for the furloughed employee on or before 19 March 2020 in order for him/her to be eligible under the CJRS remains.

What can be claimed:

The amount that can be claimed under the CJRS will be slowly tapered until 31 October 2020, when the scheme ends. For the months of July and August, the Government will continue to pay 80% of wages (up to the cap of £2,500 for the hours the employee is on furlough), but this will gradually be reduced from September onwards.

The table below taken from the Government Guidance shows the contributions that the Government will make under the CJRS in the upcoming months. Wage caps under the scheme will need to be adjusted proportionately to reflect the hours for which an employee is furloughed. For example, for an employee working 50% of their usual hours in July, the employer is entitled to claim up to £1,250 (50% of the £2,500 cap). The employer will be liable to pay all staff costs in full that relate to the 50% part-time work their employees undertake, without any grant support. Employers continue to have the option to “top up”, at their own expense, employee wages above the furlough wage cap for any hours not worked.

In addition, the Government will stop contributing towards employer National Insurance Contributions and pension contributions for any furloughed hours from August 2020. Employers will therefore need to pay these along with the contributions that relate to any hours that the employee has worked.

  July August September October
Government contribution: employer NICs and pension contributions Yes No No No
Government contribution: wages 80% up to £2,500 80% up to £2,500 70% up to £2,187.50 60% up to £1,875
Employer contribution: employer NICs and pension contributions No Yes Yes Yes
Employer contribution:
10% up to £312.50 20% up to
Employee receives 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month
Calculating payments

When calculating claims under the CJRS in respect of employees returning from furlough on a part-time basis, employers will need to know the proportion of hours for which the employee has been furloughed within the relevant claim period. Employers will therefore first need to identify the hours that the employee would usually have worked during that period.

For employees whose contracts provide for fixed hours, the starting point will be the employee’s usual working hours that he/she was contracted to work at the end of the last payment period ending on or before 19 March 2020. For employees with variable hours, the starting point will be the higher of:

  • the employee’s wages for the same month in the previous year; and
  • the employee’s average monthly wages for the 2019 to 2020 tax year.

The employer will then need to calculate the hours worked in the relevant claim period as a proportion of the usual hours worked within the same period to identify the “worked proportion” and the “furlough proportion”. 80% of the “furlough proportion” pay (up to the adjusted  maximum limit per month) for the claim period must then be calculated. For worked examples covering various scenarios see here.

As before, when calculating an employee’s wages you should take into account all non-discretionary payments, fees and commission payments. Any holiday days (including bank holiday days if usually given as annual leave) that employers require employees to take while they are furloughed must be ‘topped up’ to full contractual pay.

Time-frames and practicalities

One of the significant changes that will apply from 1 July 2020 is that employees furloughed on or after 1 July 2020 will no longer have to be furloughed for any minimum period, although employers should be aware that the three-week minimum requirement will still apply where employees began their furlough period prior to 1 July 2020.

Although there is now no minimum furlough period for individual employees, the minimum period for which employers can submit a claim is seven days. The exception to the seven-day requirement is that employers may submit claims for shorter periods only if those periods include the first or last day of the month. This exception is necessary, as from 1 July 2020 employers’ claims can only span one calendar month, e.g. separate claims must be made if an employer wants to claim for the period from 27 July 2020 – 7 August 2020. The deadline to submit claims in respect of claim periods that ended on or before 30 June 2020 is 31 July 2020.

For employees that will be “flexibly furloughed” under the new rules, employers will need to know how many hours the employee is to work/ has worked for the relevant claim period ahead of making a claim.

Written records

Previous obligations in respect of furlough agreements remain, including the obligation to keep a written record of such agreement for five years. Following the updated Guidance, employers asking employees to be “flexibly furloughed” will need to enter new written agreements confirming the new arrangements with these employees. From 1 July 2020 flexible furlough agreements can last any amount of time and can be entered into with employees more than once.

Employers need to be aware of their obligation to keep written records of the furlough process. Under the CJRS all records and calculations should be kept for at least six years, including:

  • the amounts claimed and the claim period for each employee;
  • the HMRC claim reference numbers; and
  • any calculations, including “flexibly furloughed” employees’ usual working hours and a breakdown of their hours worked and hours furloughed (in case HMRC need more information about the claim in future).
Continuing employer obligations

If employers choose to take advantage of the flexible furlough scheme they need to remember that they cannot require employees to undertake any work during the hours claimed for under the CJRS. It is also worth noting that while employers can provide part-time work to furloughed employees they are not under any obligation to do so.

Future considerations

Looking to the future, as the level of the grant available under the CJRS is reduced, employers may begin to consider redundancy more seriously. If an employer is contemplating making 20 or more employees redundant, it needs to carefully consider and manage its collective consultation obligations to avoid incurring any unnecessary future liabilities and completing and filing form HR1.

Employers should also note that whilst employees can be given notice to terminate their employment whilst on furlough and the CJRS can be used to help with (or in some cases entirely meet the legal obligation to pay) wages during an employee’s notice period it should be noted that it cannot be used to assist with redundancy payments, meaning these will still have to be funded by employers (if payable).

Lidia Poczok

Justin Costley


Miranda Cass


Julia Cockroft


Rachel Arnison

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