COVID-19 Flexible Furlough Webinar Insights

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Explore key insights from a live webinar on COVID-19 Flexible Furlough, covering important topics such as the Job Retention Scheme, Flexible Furlough Scheme, practical issues in bringing employees back, and more. Gain valuable resources and guidance on navigating the changing landscape of workforce management during the pandemic.

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COVID-19, FLEXIBLE FURLOUGH LIVE WEBINAR: 22 June 2020 PRESENTED BY: TRACEY WATTS TAX PARTNER ALBERT GOODMAN EMMA RAMSAY EMPLOYMENT LAWYER RAMSAY PATERSON

COVID-19, FLEXIBLE FURLOUGH Tracey Useful resources End of CV Job Retention Scheme (JRS) CV Flexible Furlough Scheme (FFS) Abuse Emma Employment & practical issues of bringing employees back into the workplace Redundancies 4 point plan for employers Questions/discussion

COVID-19, FLEXIBLE FURLOUGH Useful resources House of Commons Briefing Paper (CBP 8880 16 June 2020) https://commonslibrary.parliament.uk/resea rch-briefings/cbp-8880/ HMRC guidance front page https://www.gov.uk/government/collections /coronavirus-job-retention-scheme Education https://www.gov.uk/government/publicatio ns/coronavirus-covid-19-financial-support- for-education-early-years-and-childrens- social-care/coronavirus-covid-19-financial- support-for-education-early-years-and- childrens-social-care

COVID-19, FLEXIBLE FURLOUGH End of JRS purpose & important dates Purpose to support Stay at Home measures Ends 30 June First time claim by 30 June Last claim by 31 July All pay pre 30 June to go on JRS claims 3 week rule may run post July 10 June last date to furlough someone for first time

COVID-19, FLEXIBLE FURLOUGH FFS purpose & claims Purpose to support Back to Work measures & decrease Govt support 1 July 31 October First claim from 1 July Last claim by 30 November (Complete each claim by the following month?) No 3 week rule (possible overrun from JRS) - flexible Claim for furloughed hours Need to report usual hours and hours worked

COVID-19, FLEXIBLE FURLOUGH FFS purpose & claims No work to be undertaken by employee at all for employer/linked/associated DURING FURLOUGHED HOURS (records & evidence?) New agreements confirming employee has agreed to work flexibly/multiple agreements likely to be needed

COVID-19, FLEXIBLE FURLOUGH FFS Conditions for use Made a claim under JRS Only for employees who were claimed under JRS Except: Family leave returners, reservists, TUPE/PAYE scheme reorganisations Capped employee numbers (Except above workers) Employees: No work available, caring, shielding, sick, family leave Still adversely affected?

COVID-19, FLEXIBLE FURLOUGH FFS key points Employer support Govt support 1 July flexible furloughing Pay for all hours worked @ contracted rates Pay for balance of usual hours furloughed: Up to 80% of normal wages, capped at 2,500, plus Er s NIC/pension on furloughed hours 1 August Pay for all hours worked @ contracted rates Plus Er s NIC & pension on furloughed hours Pay for balance of usual hours furloughed: Up to 80% of normal wages, capped at 2,500 1 September Pay for all hours worked @ normal rates Plus Er s NIC & pension on furloughed hours Plus 10% of usual hours furloughed capped @ 312.50 Pay for balance of usual hours furloughed: Up to 70% of normal wages, capped at 2,187.50

COVID-19, FLEXIBLE FURLOUGH FFS key points Employer support Govt support 1 October Pay for all hours worked @ normal rates Plus Er s NIC & pension on furloughed hours Plus 20%of usual hours furloughed capped @ 625 Pay for balance of usual hours furloughed: Up to 60% of normal wages, capped at 1,875 Hours worked Paid @ at least NMW from April 2020

COVID-19, FLEXIBLE FURLOUGH FFS Steps Work out your Claim Period For the Claim Period: Work out Usual Hours Work out Furloughed Hours: Usual Hours hours actually worked = Furloughed Hours Work out: 80% Reference Pay for claim period Compare with Maximum Pay ( 2,500 pm, 576.92 pw, 80.65/83.34 pd) Both pro rated for Furloughed Hours/Usual Hours Claim for Furloughed Hours/Usual Hours Claim before, during or after Pay Periods

COVID-19, FLEXIBLE FURLOUGH FFS Claim Periods Min claim period 7 days (except month start/end) No month end straddling No claim periods to overlap All furloughed staff regardless of Pay Periods Closely align to Pay Periods? Pay weekly, Saturday to Friday 1,2,3 Work to 10/7 Off to 17/7 Work to 24/7 Off to 31/7 Work 1 - 31 July

COVID-19, FLEXIBLE FURLOUGH FFS Usual Hours Usual hours for the claim period Fixed or variable Fixed contracted repeating working pattern pre 19/3, calendar day pro rated for claim period EG Salaried and paid monthly for 37 hours per week =37 / 7 calendar days in RWP x 31 days in claim period =163.8 rounded UP to 164 Variable Compare: Average hours worked (& paid holiday) 19/20 to date first furloughed & Hours worked in comparative pay period(s)

COVID-19, FLEXIBLE FURLOUGH FFS Claim Claim 80% of Reference Pay for furloughed hours only Example Reference Pay 3,000 x 80% = 2,400 (Max if 2,500) Usual hours for July = 164 Worked 100, furlough hours 64 Claim period 1 - 31 July = 3,000 x 80% x (31/31) x 64/164 = 936.58 (+ NIC/pension in July only) Ee is paid for 100 hours @ normal rate, plus at least 936.58 furlough pay

COVID-19, FLEXIBLE FURLOUGH FFS example: WHAT NOT TO DO John has been furloughed by his employer since March 2020. His salary in February was 2,000 and he has recevied 80% of this each month, with his employer claiming this back under the JRS. He worked 150 hours in February and this is regarded as his usual hours. His employer intends to return him to work on 1 July, but only for half of each week until the end of October under the FFS. Gross annual salary JRS/FSS from Govt Feb June 80% July 80% August 80% Sept 70% Oct 60% Pay for work done (50% from July) Furlough from JRS/FFS Furlough from employer 2,000.00 1,000.00 800.00 1,000.00 800.00 1,000.00 700.00 100.00 1,000.00 600.00 200.00 1,600.00 Ers NIC Er's NIC from JRS Er's pension Er's pension from JRS 174.94 81.85 65.48 21.35 17.07 147.34 0.00 38.42 147.43 0.00 38.42 147.42 0.00 38.42 119.78 44.40 32.40 Gross salary cost per month 2,219.34 1,752.18 1,985.76 1,985.76 1,985.85 1,985.84 Cost to employer Cost to Govt 2,219.34 0.00 0.00 1,103.21 882.55 1,185.76 800.00 1,285.85 700.00 1,385.84 600.00 1,752.18 2,219.34 1,752.18 1,985.76 1,985.76 1,985.85 1,985.84 % cost to employer How will Er's NIC and pension be apportioned?? 100% 0% 56% 60% 65% 70%

COVID-19, FLEXIBLE FURLOUGH Anti abuse

COVID-19, FLEXIBLE FURLOUGH Anti abuse No claim contrary to exceptional purposes of the JRS/FFS 6 year record retention Likely: Tax rate of 100% on erroneous claim Normal enquiry procedures enquiry windows, assessment time limits, penalties based on behaviour TOP TIP document & date everything & RETAIN

COVID-19, FLEXIBLE FURLOUGH JRS v FFS

Flexible Furlough Scheme Legal and practical implications for employers Emma Ramsay Ramsay Paterson LLP 22 June 2020 www.ramsaypaterson.co.uk

Flexible Furlough Scheme (FFS) New furlough agreements By agreement only Employee response not required for original agreement is required for flexible furlough Employment law Equality and discrimination law (Note furlough can be a benefit or a detriment)

Flexible Furlough Scheme (FFS) Technical requirements (employment points) bring furloughed employees back to work for any amount of time and any [shift/work] pattern while still being able to claim CJRS grant for the hours not worked If current furlough started before 1 July must complete 3 week period Holiday National Minimum wage

Flexible Furlough Scheme (FFS) Practical steps Consultation/assessment Elected representatives or directly? When to start No blanket rule variations for personal issues