Miscalculated furlough payments

Epegg

My partner has been put on furlough and his payments have not taken into account his average earnings (his contract is 40hrs over 5 days, but he almost always does a Saturday too). The company seem to have put in only his basic earnings, by my own calculations he should be being paid around £70 more each week minus tax,N.I and pension contributions. I’m still working (key worker) but with 4 children the money is tight, can his employer amend their application so that he receives the corrected amount? 

bradders1983

Has he asked?

Epegg

To be honest just need to know where we stand, from what I’ve been able to see online (gov.uk) it appears claims can’t be amended. He doesn’t want to say anything until we know we’re in the right and that they won’t have a case to argue (boss can be a bit dodgy) 

Grumpy_chap

The following link from the .gov website explains what is included for furlough calculation:
https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme
What to include when calculating wages includes regular wages and non-discretionary overtime.
If it is not obvious (from contract etc) to your partner whether the overtime he does is discretionary, then hopefully someone else on here can assist with a standard definition of non-discretionary overtime versus discretionary overtime.

Jeremy535897

Grumpy_chap said:

The following link from the .gov website explains what is included for furlough calculation:
https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme
What to include when calculating wages includes regular wages and non-discretionary overtime.
If it is not obvious (from contract etc) to your partner whether the overtime he does is discretionary, then hopefully someone else on here can assist with a standard definition of non-discretionary overtime versus discretionary overtime.

There is still a lot of debate on this issue. I believe that discretionary overtime is confined to cases where the employer is not contractually obliged to pay an employee overtime, but does so out of the kindness of his heart (for example a salaried employee who is not entitled to overtime pay works over Christmas and his employer gives him some extra cash as a thank you).

Epegg

This is what the contract says... we are at a loss!!! 

Jeremy535897

Epegg said:

This is what the contract says... we are at a loss!!! 

What does the bit under "Remuneration" say?

Epegg

Daily rate has changed since contract was signed

Jeremy535897

That says the employer has to pay for overtime worked, and therefore in my opinion it is not discretionary, and should form part of the furlough calculation. See:

"What to include when calculating wages

The amount you should use when calculating 80% of your employees’ wages is regular payments you are obliged to make, including:

• regular wages you pay to employees
• non-discretionary overtime
• non-discretionary fees
• non-discretionary commission payments
• piece rate payments

You cannot include the following when calculating wages:

• payments made at the discretion of the employer or a client - where the employer or client was under no contractual obligation to pay, including:
  • any tips, including those distributed through troncs
  • discretionary bonuses
  • discretionary commission payments
• non-cash payments
• non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay"

I think your partner is a variable pay employee. The Treasury Direction defines a fixed rate employee as follows:
"7.6 A person is a fixed rate employee if-
(a) the person is an employee or treated as an employee for the purposes of CJRS by virtue of paragraph 13.3(a) (member of a limited liability partnership),
(b) the person is entitled under their contract to be paid an annual salary,
(c) the person is entitled under their contract to be paid that salary in respect of a number of hours in a year whether those hours are specified in or ascertained in accordance with their contract (“the basic hours”),
(d) the person is not entitled under their contract to a payment in respect of the basic hours other than an annual salary,
(e) the person is entitled under their contract to be paid, where practicable and regardless of the number of hours actually worked in a particular week or month in equal weekly, multiple of weeks or monthly instalments (“the salary period”), and
(f) the basic hours worked in a salary period do not normally vary according to business, economic or agricultural seasonal considerations. "

I don't think your partner meets 7.6(e). If I am right, the furlough pay should be calculated as follows:

"Employees whose pay varies and were employed from 6 April 2019

If the employee has been employed continuously from the start of the 2019 to 2020 tax year, you can claim the highest of either:

• 80% of the same month’s wages from the previous year (up to a maximum of £2,500 a month)
• 80% of the average monthly wages for the 2019 to 2020 tax year (up to a maximum of £2,500 a month)"