Furloughed Employee: Scenario

bruno18

Hi,
Hope someone has a grasp on how this practically works. Some context - Pharmacy with multiple staff however not all staff can be kept on as the shop sells many other items besides medicine so there is no need for everyone to be in as Sales have dropped dramatically outside of Medicines and Collections of Prescriptions.
I understand the claiming back of the 80% wage up to £2500 per employee. 
However the grey area with that 20% gap that can't be claimed so:
1. Employer pays your wage as normal and employee receives the same as usual and then employer reimburshed for 80% of that.
2. If the employer can't afford that 20% top up how do they practically make that work on payroll?
Drop the hourly wage by 20% (But then employee falls under National Minimum Wage) and then still only claiming back 80% of a lower wage pay out. This seems in the best interest of employer if employee agrees. 
Ask the Employee for 20% back (How would you get that in writing that works with Employment Law)
Employee agrees in writing to OWE a day back (For every week kept on Furlough)
Agree with Employee to use the 20% difference to Top Up fellow colleagues still asked to work (However that is legally arranged seems the Fair thing to do!)

I am an employee and I would agree to topping up fellow colleagues who have to stay on working. I'd also agree to dropping my wages so Employer didn't have to pay out as much per week before reimburshment. 

Advantages:
1. Less people in the workplace to spread the VIRUS thus saving lives
2. Financially the Business has saved money for staff they don't exactly need until the Economy picks up again

WIN WIN

Jeremy535897

If you are furloughed you don't work at all so why is the hourly rate being below the national minimum wage relevant? There are no hours to calculate it on.

bruno18

Hi Jeremy. 
So are you implying that the figure sent to HMRC would only be a Monetary Value and they wouldn't see the Hourly Rate anyway. So if agreed with Employee you could theoretically drop the wage from say £9 per hour to £7.20 and times that by usual hours worked and send that figure to HMRC, if employee agrees of course. Apologies if I misunderstood your reply

Jeremy535897

Let us suppose you paid employee X for 100 hours in February at £9 an hour so their wage was £900. Let us suppose (we don't know) that this is used for the 80% calculation. The employee is furloughed on 31 March after working 95 hours so far in March. They are paid £9 an hour for those hours.
In April they work zero hours as they are furloughed, and get £900 x 80% = £720 for working no hours. How does minimum wage come into this? Just because you arrive at the number payable by looking at some past history of hours is not the same as falling below the minimum wage.

bruno18

I was only dropping the the employee wage to £7.20 so that the employer could save extra money but I was only asking about the legality of doing so. As odd as it may seem I am the employee showing loyalty to the business and trying to save them some money.

If they don't cover the 20% difference how is that deducted from the employee wage or if it isn't how is it paid back to the employer from said employee. That's what we don't know yet, I'm just presenting the inevitable scenarios. Hopefully government iron these out in due course

Jeremy535897

I don't think this is a problem.

sharpe106

It is only a tempory measure and they are not working the hours. So the NMW will not apply. The buisness can claim 80% of the pay of the employees that they want to furlough and it is up to them if they want to top it up or not. If they can't or do not want to top it up they just pay the employee 80%.