Job Retention Scheme : Working Days vs Days Worked (or 80% vs 54%)

neon013

My employees are on fixed hours contract/salary (say 37.5 hours per week Monday to Friday) but will be paid for every hour worked.

In calculating their 80% I used the number of days worked to get their daily pay i.e. March 2019 pay divided by 21 working days x 0.8 or £2500 /21 days maximum pay.

When reviewing gov.co.uk guidance it always divides the salary for that month by 31 days (in March 2019) or the £2500 limit / 31 days. The scheme is therefore only paying 80% of a salary if the worker works every day of the year/month. Therefore in my example they would be paying 21/31 x monthly salary x 0.8 = c 54% of pay.

My original calculations reflect 80% pay but the guidance given (in my opinion) shows 54% of pay.

I cannot understand why everyone is not challenging (or Martin claiming false advertising) and ultimately which calculation should be used?

I have not yet put in a claim but I have paid employees on the original days worked calculation as to me that seems to be the real 80%.

Illusionary

Have you read the calculation guidance in full? https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

It's very clear here that the calculation counts all days on furlough, not just weekdays/working days. There are also a number of examples that demonstrate this approach.

neon013

Dear Illusionary.

A bit harsh.

I did indeed read the guidance when it was published after our payday. I have spoken to several employers who have ultimately fallen into the same trap. If your hourly rate was £10per hour and the scheme promised 80% then you would expect £8 per hour.

Two errors on my behalf

1.       Using working days.

2.       A furlough day is not a working day hence I pay (a furloughed day) on Saturdays and Sundays even if an employee doesn’t normally work those days but has been furloughed.

Hopefully you agree with the above and this post is of use to some (idiot) like me who is not great at reading the manual (when it was eventually provided).

Illusionary

neon013 said:

Dear Illusionary.

A bit harsh.

I did indeed read the guidance when it was published after our payday. I have spoken to several employers who have ultimately fallen into the same trap. If your hourly rate was £10per hour and the scheme promised 80% then you would expect £8 per hour.

Two errors on my behalf

1.       Using working days.

2.       A furlough day is not a working day hence I pay (a furloughed day) on Saturdays and Sundays even if an employee doesn’t normally work those days but has been furloughed.

Hopefully you agree with the above and this post is of use to some (idiot) like me who is not great at reading the manual (when it was eventually provided).

No intention to be harsh, so apologies if you got that impression - but as ever, it's hard to read tone from written posts! Plenty of people aren't aware of the full scope of the guidance available, especially when it's being updated very frequently.