Flexible Furlough – be prepared for the change – usual hours and worked hours

More detail on the #coronavirus Job Retention Scheme (CJRS) are due 12th June 2020 along with new calculator and guidance applicable for the introduction of flexible furlough.

The current CJRS phase 1 ends at the end of June 2020 with employers set a claim deadline of 31st July 2020. Employers will need to ensure that any furlough between 1st March and 30th June are finalised and claimed by submission of the grant application.

The current furlough arrangement is based on calendar days. Information published indicates that from 1st July employers will need to proportion furlough between work time and usual hours.

Early information indicates that Employers are expected to be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

The basis of furlough reference pay remains the same, either the usual regular pay as reported by 19th March 2020 on RTI FPS, or for variable paid employees, the average of pay up to 19th March for the 2019/2020 tax year, or the same period in 2019.

Employers will need to derive the usual hours that are associated with the furlough reference pay. This will aid calculation of furlough grant amounts based on the proportion of worked hours compared with the usual hours associated with furlough reference pay. Of course, employers must pay 100% of worked hours and ensure compliance with National Minimum (or Living) Wage.

Will employers and payroll be able to define usual hours? What about payments in arrears. Will the basic rate for worked hours actually be lower than the average pay used for furlough?

The past 3 months have been both interesting, challenging and confusing for payroll teams. It’s all change for July, and then August and so on,

PAYadvice.UK 3/6/2020.

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