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COVID-19 Update: Coronavirus Job Retention Scheme; how the scheme will change from 1 July

From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim a grant for the hours not worked. For employers to be eligible to claim from this date they must previously submitted a claim for that employee in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have been furloughed for the first time was 10 June. This may differ if they were returning from statutory parental leave.

From 1 August 2020, employers will be asked to contribute towards the cost of furloughed wages to ensure the employee continues to receive at least 80% of their wages whilst on furlough. Click here for more details on these changes.

The scheme is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognizes different businesses will face different impacts from coronavirus.

Prior to 1 July 2020, a furloughed worker, cannot undertake any work for the employer other than training. From 1 July, employers will:

- Only be able to claim for employees who have previously had a claim submitted for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June. This means the last day employees could have started furlough for the first time was 10 June.

- Be able to flexibly furlough employees – this means employers can bring employees back to work for any amount of time, and any shift pattern

- still be able to claim the furlough grant for the hours flexibly furloughed employees do not work, compared to usual hours they would have worked in that period.

If employer flexibly furloughs an employee, they’ll need to agree this with the employee (or reach collective agreement with a trade union) and confirm the new furlough arrangement with them in writing. The employer would need to:

- Make sure that the agreement is consistent with employment, equality and discrimination laws

- Keep a written record of the agreement for five years

- Keep records of how many hours you work and the number of hours you are furloughed (i.e. not working).

They do not need to place all their employees on furlough, and they can continue to fully furlough employees if they wish. Employee cannot undertake any work for the employer during time that is recorded as you being on furlough.

Employees can be on any type of contract, including a zero-hour contract or a temporary contract. Foreign nationals can still be furloughed under the scheme.

If an employee has been flexibly furloughed, employers will need to work out their usual hours and record the actual hours they work to calculate their furloughed hours for the claim period.

Employers should work out employees usual hours for each pay period using the guidance set out by HMRC here if either:

- Employee is not contracted to a fixed number of hours

- Employee’s pay depends on the number of hours you work

Otherwise, they should use guidance set out by HMRC here.

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