An Employer's Guide To Furlough

The Job Retention Scheme, more commonly known as furlough, has been a lifeline for businesses of all sizes since the pandemic hit. That being said, managing furloughed employees is an ever changing landscape at the moment, and with your teams waiting on guidance from you on what to do next – it can be tough to stay on top of all the new information.

Thankfully, the Chancellor’s announcement on the 29th of May announced some brand new information around flexible furlough that should help to ease concerns about where to go from here. The government has set out some really helpful milestones to give employers something to work towards through to Q4 2020.

What is furlough?

Furlough is the term given to the Job Retention Scheme, a system that has been put in place by the government to help pay 80% of an employee’s wages (up to £2,500 per month) while they are unable to work due to the coronavirus pandemic. The scheme comes as a form of relief for businesses that aren’t able to continue paying employees’ wages due to a downturn in the economy.

There are tonnes of benefits to the scheme, utilising furlough means that you as an employer can:

  • Furlough any member of staff for a minimum of 3 weeks provided they are on your PAYE on and after the 19th March 2020 – including directors and apprentices
  • Keep your furloughed employees on the books so they can return once business picks back up
  • Prevent redundancies that you may have otherwise had to make
  • Only pay up to 20% of an employee’s wage while the government covers the rest
  • Furlough someone multiple times, meaning you could furlough your team on rotation if you wanted to

Cap on new entrants

Unfortunately, if you’re only looking into utilising furlough for the first time, you may have missed the boat. The scheme is going to be closed to new entrants as of the 30th of June. However, you can still make use of the Job Retention Scheme by re-furloughing employees who you’ve already had on furlough for the full 3 week minimum period as of the 30th of June.

This makes rotational and flexible furlough the best options for those unable to extend the scheme to any new applicants.

Rotational furlough

Many businesses have been opting to furlough their teams on rotation, meaning that a group that was furloughed for 3 weeks could then return to work for 3 weeks while another group is placed on furlough.

The up-side to doing is this way is that you still get to make the most of your team’s unique skillsets, nobody gets too out of practice and it ensures you can still bring part of your team back to cover against illness and so on.

It’s also not as complicated as you might think. As long as the team you want to rotate were all put on furlough at some stage for the full 3 weeks or more before the 30th of June, you are able to re-furlough them.

Flexible furlough

Flexible furlough is seen as a really attractive option to many employers as it means that your team are able to come back and work some of their hours, but still receive government support for hours that they don’t work.

From the 1st of July, employees given ‘part time furlough’ will get up to 80% of their unworked hours paid for them. The benefit to this is twofold, you can start to gradually reintroduce your furloughed team back into the business and bring them back in more and more as business picks back up.

Additionally, there is no limit on the number of contracted hours a flexibly furloughed employee must work, so it puts a little more control back in your hands.

Concerned that you may have missed a trick by bringing your furloughed team back in full time before discovering that flexible furlough was an option? Don’t worry, you are able to place someone on flexible furlough who has since returned to work so long as they were furloughed for the full 3 weeks or more prior to the 30th of June cut-off date.

As you can see, the Job Retention Scheme is still very much here to lend a helping hand and seeks to gradually ween businesses off of government support rather than put a sudden stop to it.

However you choose to make the most of furlough through to Q4, the Chancellor has confirmed that the scheme will wind down in September and October with new caveats being brought in in July.

Concept Resourcing is committed to providing our network with the most up to date information on managing your workforce through COVID-19, for more advice on the ever changing guidance on furlough and returning to work – follow us on LinkedIn.

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Chloe Swain

15th June

Hiring Advice