Flexible Furlough – What you need to do

Changes are being made to the Coronavirus Job Retention Scheme (CJRS) this month, and each month thereafter until its conclusion on the 31st of October. You can see a full outline of these changes here.

From the 1st of July employers can bring employees back to work for any number of hours. They will be responsible for paying the employees for the hours they work but can still claim a CJRS grant for the hours they don’t work. These employees will be considered flexibly furloughed.

We’ve outlined a few FAQs regarding flexible furlough below, as well as how to process flexible furlough pay in Primo Umbrella. If you have any additional questions please send an email to our support team on support@accentra.co.uk

FAQ

Who is eligible for furlough pay from the 1st of July?

Only employees who have previously been furloughed for at least 3 consecutive weeks between the 1st of March and 30th of June.

How do I calculate how much I can claim through the CJRS?

You can use the HMRC calculator which can be found here.

It can be used to calculate how much you can claim for in a claim period ending on or before the 31st of August. It cannot be used if employees:

  • returned from family-related statutory leave (maternity leave, paternity leave, shared parental leave, adoption leave, parental bereavement leave)
  • get director’s payments
  • have been transferred under TUPE
  • have been employed at separate times throughout the year
  • receive employer pension contributions outside of an auto-enrolment pension scheme
  • have an annual pay period

If you are claiming for employees who are flexibly furloughed you will have to calculate their usual and furloughed hours before using the calculator. If you can’t use the calculator you will need to carry out the calculations manually using available guidance or seek assistance from an accountant or tax adviser.

What are employees’ usual hours, and how do I calculate these?

An employee’s usual hours are the hours they are normally contracted to work.

There are a couple of different methods to calculate an employee’s usual hours depending on whether they work fixed or variable hours.

For fixed hour employees:

  1. Start with the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020.
  2. Divide by the number of calendar days in the repeating working pattern, including non-working days.
  3. Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for.
  4. Round up or down if the result isn’t a whole number.

For variable hour employees:

  1. Start with the number of hours actually worked (or on paid annual leave or flexi-leave) in the tax year 2019 to 2020 before the employee was furloughed, or the end of the tax year if earlier.
  2. Divide by the number of calendar days the employee was employed by you in the tax year 2019 to 2020, up until the day before they were furloughed, or the end of the tax year if earlier.
  3. Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for.
  4. Round up or down if the result isn’t a whole number.

See this page for more detail.

What are furloughed hours?

Calculate furloughed hours by:

  1. Starting with your employee’s usual hours.
  2. Subtracting the number of hours they actually worked in the claim period

Next steps

  1. Make a calculation for any other employee furloughed for all or part of your claim period. Make a note of each set of figures.
  2. Work out the total amounts to claim for:
    • furlough amount
    • employer National Insurance
    • employer minimum pension contributions
  3. Adjust the total amount of employer National Insurance contributions by subtracting any Employment Allowance used in each pay period.
  4. Make a claim using the Job Retention Scheme online claim service.

Processing Flexible Furlough in Primo Umbrella

First, you need to enable the flexible furlough feature in each contractor record of the contractors who will be flexibly furloughed. You can find this under the umbrella tab in the furlough settings section.

You can import or manually input timesheet data for flexibly furloughed contractors, but you will have to manually input their furlough payment amount in their record before processing payroll each period.

Click here to see a full example of how to calculate furlough payment amounts for flexibly furloughed employees.

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