Calls for furlough scheme to reimburse parents who work shorter hours

The Chancellor should consider extending 80% wage replacement to employees who reduce their working hours to accommodate childcare responsibilities, according to a new study.

The report by the Institute for Fiscal Studies calculates that, for some parents, combined responsibilities for work and childcare may take up the entire day. It says one way round this is for employers to allow them to flex their hours around childcare commitments. However, it recognises that not all jobs will be able to support fully flexible working and that reduced hours might be a better option.

The current furlough scheme allows parents to give up work completely to look after children, but it does not reimburse them for working shorter hours, says the IFS.

This incentivises couples to have one parent give up work completely while the other works their regular hours and that this is likely to increase gender inequalities, it states.

The report says: “To help avoid this, the government should consider reimbursing employees who reduce their hours, but not to zero, to manage childcare or other caring responsibilities.”

It adds: “Furlough is an all-or-nothing proposition – it does not allow employees to reduce their hours while continuing to work. This means the design of the programme might incentivise dual-earner couples struggling with childcare responsibilities to have one parent continuing to work their usual hours while the other is furloughed.”

The call for a more flexible scheme was backed by the Chartered Institute of Personnel and Development which asked for furloughed employees to be allowed to work reduced hours for their existing employer where possible so that organisations can flex their workforce more efficiently and reduce the cost of the scheme for taxpayers. They said it would also help organisations reintegrate furloughed workers gradually, which is likely to be necessary if lockdown measures are phased out over time.

The furlough scheme goes live this week.

Meanwhile, figures obtained by The Times from HMRC under the Freedom of Information Act show men are nearly five times more likely than women to earn the highest salaries in the UK. The figures show that men are 4.6 times more likely to earn more than £150,000 a year, with the figure rising above eight times for those earning £1m or more. Economists say that the dominance of women in lower paid sectors, such as hospitality and retail, is preventing them from earning the highest salaries. However, the HMRC figures also show that the number of women earning more than £150,000 has risen faster than it has for men over the past five years, while the number of women earning over £50,000 has grown more than twice as fast.

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