Flexible furlough - Changes to the Coronavirus Job Retention Scheme

P. Simon Parsons - 15 June 2020 - Reading time: 4 Minutes


The first part of the Coronavirus Job Retention Scheme covered furloughed periods for employees from 1st March 2020 through to 30th June 2020, and it is coming to an end. Employers who are wanting to receive a grant are required to complete their online application by 31st July 2020. Employers will need to finalise the calculation of payments and claims. For each following calendar month, a series of changes will occur with the introduction of CJRS part two which offers flexible furlough. The CJRS will close on 31st October 2020.

Who qualifies for flexible furlough?

Employers can negotiate a new flexible furlough arrangement with employees who already had a period of 21 days continuous furlough. Additionally, the scheme is available to parents returning from extended maternity, adoption and shared parental leave. The change will require new legal agreements and planning to coordinate the needs of getting Britain back to work, whilst keeping Britain paid.

What is the main difference?

The key difference is that there is no minimum period of furlough. The basis of furlough and grant proportion is to be based on the difference between actual hours worked and the employees’ usual hours in the calendar month. The relevant hours now form part of the online claim process.

  • From 1st July 2020 employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for hours not worked.
  • From 1st August 2020 the grant is reduced each month. Employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
  • Wage caps are proportional to the hours an employee is furloughed and there are no changes to grant levels in June.
  • July– the government pays 80% of wages up to a cap of £2,500 for the hours on furlough, including employer National Insurance Contributions (ER NIC) and pension contributions. Employers must pay for the hours worked.
  • August – the government pays 80% of wages up to a cap of £2,500 for the hours on furlough only. Employers now pay all ER NIC and pension contributions.
  • September – the government will pay 70% of wages up to a cap of £2,187.50 for hours on furlough. Employers additionally top up wages to ensure 80% is paid up to a cap of £2,500, for time furloughed.
  • October – the government will pay 60% up to a cap of £1,875 for the hours on furlough. Employers top up employees’ wages to ensure they receive 80% up to a cap of £2,500 for time furloughed.

Employers can choose to top up furloughed hours wages above 80% at their own expense. Employers must pay for hours worked.

Flexible furlough

Where can you find more details?

HMRC has updated guidance late into the evening of Friday 12th June 2020. Employers now need to plan and prepare if they are furloughing employees into July 2020.

The HMRC library of guides can be reached at:

Collection Coronavirus Job Retention Scheme
Changes to the Coronavirus Job Retention Scheme

Check if you can use the scheme

This identifies changes applied on 12th June 2020 to the following:

Check if you can use the scheme
Check which employees you can put on furlough

Work out what you can claim

Guidance was updated on 12th June on how the scheme will change from 1 July. The first time the employer can make claims for days in July is the 1st July. 31st July is the last day to submit claims for periods ending 30th June.

Steps to take before calculating your claim
Calculate how much you can claim
Find examples to help you calculate your employees’ wages

Claim and report earnings

For employees who are flexibly furloughing, employers need to have agreed the furlough arrangement with the employee (or reached a collective agreement with a trade union) and keep a written agreement that confirms the furlough arrangement. For the claim new data is additionally needed:

  • Number of usual hours the employee would work in the claim period
  • Number of hours the employee has or will work in the claim period
  • Keep a record of the number of furloughed hours in the claim period

Claim for wages
Reporting employees’ wages when you’ve claimed

Usual Hours

Employers and payroll professionals utilising flexible furlough will need to undertake assessment and calculations to deduce usual hours. Measures need to be put into place to accurately record work time.

Unmeasured work

Early indications imply that employees with any element of unmeasured work cannot utilise flexible furlough and they will not qualify for grant.


The furlough scheme has been welcomed by UK PLC and has helped save millions of jobs. Moving into flexible furlough offers employers the opportunity to plan a staggered return to work. However, there are some complexities on the journey of defining pay and claiming the online grant and meeting what may be viewed as complex calculations to derive the required proportions.

I wish the payroll profession all the best on maintaining its resilience over this period. My advice is to:

  • Plan it
  • Agree it
  • Pay it
  • Claim it

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