5 new flexible furlough rules including how part-time pay is calculated

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FURLOUGH is going to be changing from July 1, including allowing employees back to work part-time.

But with changes come a raft of new rules and they can be complicated to get your head around.

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Chancellor Rishi Sunak has announced that workers can return part-time from July 1Credit: London News Pictures

The Government has released a round of new guidance for employers and employees about how what changes are being made to the scheme from July 1 and how they can be implemented.

Allowing furloughed staff to return to work part-time will particularly benefit smaller businesses, said Craig Beaumont, director of external affairs at the Federation of Small Businesses.

He added: “We really hope to see progress made on a part-time furlough because smaller businesses in particular benefit from being able to quote for new work, keep in touch with employees and pay their invoices.”

The rules are due to change again in August 1 and will see bosses being to pay furloughed employees National Insurance and pension contributions.

For now, we take you through the changes in guidance that come into play from next month, including how to work out your take home pay if you’re going back to work part-time.

1. How to calculate your pay if you’re furloughed part-time

At present, staff cannot work for the same company while on furlough.

From July 1, employers can ask workers to return to their jobs on a part-time basis – how many hours is up to the employers but they must pay you in full for the time that you work.

The Government will continue to pay up to 80 per cent – up to £2,500 – of the portion of wages for the contracted hours they are unable to work.

Can I be made redundant if I’m on furlough?

EVEN though furlough is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.

But it doesn’t affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.

Your employer should still carry out a fair redundancy process.

You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.

How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:

Half a week’s pay for each full year you were under 22,
One week’s pay for each full year you were 22 or older, but under 41,
One and half week’s pay for each full year you were 41 or older.

Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.

There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.

You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.

If you’re made redundant after your company has gone into administration you can claim redundancy pay via Gov.uk.

Employers will still have the option to top up the furlough pay to 100 per cent but it’s not a legal requirement and they don’t have to.

But if your wages aren’t being topped up, it’s complicated to work out, so bear with us as it may help you with your household budgets.

Ex-HMRC inspector Kevin Humphreys, from Integrated Dispute Resolution, explains how to work out your take home pay if you’ve been furloughed part-time.

To work it out, you’ll need to know how many days and hours you would be working if you were on your normal contracted hours, how many days and hours you’ll be working at full pay during the pay period, how many days and hours you’ll be furloughed for.

For our example, we’re assumed that you normally take home £2,000 per month, working an 8-hour day, five days a week.

While you’ve been on furlough, you’ve received £1,600 a month – 80 per cent of your normally salary.

Let’s say your employer has asked you back for two days a week – every Tuesday and Thursday – through July.

The number of working days can differ depending on the month but in July it’s 23 – you’ll work nine days at full pay and be furloughed for 14 days.

To work out how many hours that is, multiply the number of days by 8 (the number of hours you work in a day).

The total hours that you could work if you were full time is 184 (23 days x 8 hours), the total number of hours you’re furloughed for is 112 (14 days x 8 hours), and the total number of hours you’ll be working for is 72 (14 days x 8 hours).

To work out the furlough pay, you’ll need to divide the number of furloughed hours by the total number of hours you’re contracted to work, multiplied by your total monthly pay, multiplied by 80 per cent.

When will furlough end?

THE scheme will end at the end of October but the government has insisted that workers and businesses will still get support.

Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

Employees who believe they are not getting their 80 per cent share can also report any concerns to the HMRC fraud hotline.

HMRC will not hesitate to take action against those found to be abusing the scheme.

In this example, the maths would be: 112 hours ÷ 184 total contracted hours x £2,000 normal monthly salary x 0.8 = £973.91.

You need to do the same thing but with the number of hours your work to calculate how much you’ll be paid in full.

In this case it’s: 72 hours ÷ 184 total contracted hours x £2,000 total monthly salary = £782.60.

You’ll then need to add the answers together to get your total pay – in this case it’s £1,756.51.

Going back two days a week in July will see your furlough pay increased by £156.51 a month.

Remember, how much you’ll take home depends on the days that you work and what month it is so you’ll need to run the calculation again with the updated figure to work out August’s pay.

If you’re an employer, you can use the free Government calculator which will tell you how much you can claim for each member of furloughed staff.

Workers who aren’t able to go back to work part-time and will continue to receive 80 per cent of their full salary can use The Salary Calculator for free to find out their take home pay.

2. Who can be put on furlough

Workers on anytime of employment contract can be furloughed, including full-time, part-time, agency, flexible or zero-hour contracts.

But to be eligible for the scheme from July 1 onwards, workers must have been furloughed for at least three consecutive weeks between May 1 and June 30.

They must also have already been enrolled on the scheme before June 10, which is when the Chancellor closed it to all new applicants.

Employees will also have to have been on the RTI payroll on March 19 2020, be enrolled on PAYE and have a UK bank account.

Unfortunately, no further guidance has been issued for the thousands of new starters who are not eligible for the scheme because of a loophole in the criteria.

3. Limit to the number of claims employers can make

Up until June 10, employers could enrol an unlimited number of members of its workforce onto the Government scheme.

It allowed companies a bit more flexibility to bring back employees full-time depending on the amount of work there was that needed to be carried out.

But from July 1, the number of workers an employer can put on furlough will be capped at the maximum number it has previously claimed for.

For example, let’s say an employer had previously submitted three claims between March 1 2020 and June 30 2020, and each claim was for 30, 20 and then 50 employees.

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The maximum number of employees that company can claim furlough for at any one time is capped at 50 from next month.

This is to encourage bosses to ease workers back onto the payroll full-time.

For example, an employer had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.

4. Three-week furlough rule change

Currently, workers have to be furloughed for three weeks at a time before employers can claim the cash back from the Government.

But the in the latest round of guidance, employees can be furloughed for any amount of time from July 1.

However, employers can only claim the money in minimum blocks of seven calendar days.

Before they can be rolled onto the flexible furlough scheme, a worker will need to complete their current three-week stint on the CJRS first.

For example, if an employee is begins a new three-week period on June 22, they won’t be able to work part-time until its over which will be on July 12.