Guidance on new furlough and self-employed schemes

As detailed in our blog on 29 May the Coronavirus Job Retention Scheme (also known as the furlough scheme) and the Self-Employed Income Support Scheme were both recently updated. The detailed guidance on both have now been released. The important additional details arising from this guidance are as follows.

Coronavirus Job Retention Scheme

As noted in our previous blog post, a new flexible scheme is being introduced from 1 July 2020. This allows employees to work part-time without breaking furlough. The amounts that can be claimed will also change from 1 August 2020 onwards. To facilitate the movement from the old scheme to the new one there will be a change in the periods for which claims can be submitted as follows

  • Periods up to 30 June 2020 – These must be submitted by 31 July 2020 at the latest. A claim up to 30 June 2020 will need to be submitted for any employees on furlough at that time. This will still be the case, even for employees that will continue to be fully furloughed after that date.
  • Periods from 1 July 2020 onwards – Claim periods must start and finish within the same month. If a pay period spans 2 months, separate claims must be made for the parts that fall within each month. Claims must normally be for a minimum of 7 days. They can only be shorter if they are covering the period at the start or end of the month (i.e. due to a pay period crossing 2 months by a few days).

The details of how flexible working will operate have also been provided. Based on the guidance, employees can do any number of hours under flexible working. The amount they are due will be based on what their usual hours are. This will be based on their contracted hours where they have a fixed salary. Where an employee has variable hours then this will be the highest of the hours for the same period last year and the average for the last year. Wages are paid as follows.

  • Worked hours – 100% paid at their hourly rate. Where there is no historical hourly rate, this should be determined by dividing their salary by their contracted hours. This must be at least minimum wage.
  • Furloughed hours – Calculated as usual hours less worked hours. Minimum of 80% of their hourly rate, subject to a daily maximum. This can be below minimum wage. The daily maximum (furlough pay divided by number of calendar days not worked in the month) is the historical maximum of £2,500 per month, divided by the number of calendar days in the month (£80.65 per day for July, August and October. £83.34 per day for September)

Up to the end of August, the reclaim for furlough pay will be the same as the minimum 80% that must be paid to employees for furloughed hours. This will drop to 70% in September and 60% in October.

Self-Employed Income Support Scheme

As noted in our previous blog post, a second round of self-employed support has been announced. Claims under the previous scheme have to be made by 13 July 2020 at the latest. The new grant should be claimable in August 2020. It can be claimed independently, whether a claim was made under the first scheme or not.

It has now been announced that self-employed businesses will have to be adversely affected at 14 July 2020 to qualify. This is a change to the original announcement that said the criteria would exactly match those of the original scheme.