I think my employer has calculated my furlough money using the wrong method

mkboy

In my normal job, I work part time three days a week, always the same three days and have done since January. Before january I worked the same job but TWO days a week, for the past 10 years. This means that, usually, I get the same fixed wage every week (I'm weekly paid).

Sometimes, I get more if I work extra shifts due to staff illness etc (who wouldn't!)

Sometimes I get less if I'm off sick (of course)

But the core three days does not change from week to week normally. But looking back over the last year, there have been quite a number of weeks when i have had extra shifts especially in the run up to last christmas when one of the other staff was on long-term sick leave.

So how to calculate my furlough wage... I assumed they would claim for 80% of my normal three-shift wage.

But the accountants that do the company's payroll have decided to advise my boss that all staff on an hourly rate (as opposed to a salary) will be treated as flexible contract workers (like bar staff and waiters who do different rotas every week to suit)

So they have used the average-everything-over-the-last-year method of calculation for me as well as the bar staff. This means that all the months last year up to december where I only worked two shifts drag the "average wage" value down over the year and means that the two methods of calculation produce two results that are about £30 different. I'm losing out £30 a week just because of a choice of method that I have no control over.

Can I insist they use the your-most-recent-normal-pay-packet method to calculate my furlough or can they just choose which ever method they want and I have to accept it?

The part-answer I have had so far (via my boss) seems to be that they have to use the year-average method for all hourly paid staff and the last-wage-period method for all salaried staff... is this true? I didn't think it would matter whether you were hourly rated or salaried, it was whether your pay could be predicted on a normal basis (which mine can!)

Jeremy535897

It's a hard question. If you never worked extra shifts, I would definitely say you are correct. But your pay does vary with extra shifts. Here's the legislation:
"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."

Do you meet 7(e)? You have to meet them all.

What your employer pays you is per your amended contract of employment. What does that say? Technically what the employer claims for you under CJRS doesn't actually matter to you, except that they cannot pay you less, they have to pay you at least 80% of your reference salary to be able to claim, and your amended contract could give them a right to claw back wages they cannot claim for.

HMRC will not penalise them for using the wrong method, so long as the method they do use is reasonable. I suspect it is reasonable in this case as your pay does vary.

mkboy

Thankyou so much for that comprehensive answer. I can fill in to answer your question a bit I think...

The reality on the ground is that my employer is only paying me the exact money he claims from the CJRS. THATS why I have skin in the game.... If he underclaims, I suffer.

My contract, when I joined over 25 years ago, was to do the job Im doing "full time" that is five full shifts per week never varying, and paid weekly (common back in those days) such that I worked 40 hours each week and got paid 40 hours each week. I never worked extra shifts because there were none.

My original contract was for a full-time job. I never questioned whether it was a salary or not because it never changed anyway.

Then many years ago I requested to drop to 2 shifts a week, and this happened with the verbal agreement of the general manager at the time (long since left the company). This I did and got a pro-rata reduction in my wage packet (of course!). But it also meant that there was room to do extra shifts if the other person (who took over my old shifts) was ill or on holiday. I want to be clear that I never HAD to do any of these extra shifts... I was asked to do them "as a favour please" so that no-one else had to cover them. There could be no sanction if I refused, since that is NOT what we agreed back in the noughties when I dropped to two shifts... And so over the years I did do some extra shifts which yes varied my pay packet because extra shifts are outside of my contracted two shifts a week.

Wind the clock forward to last April, the beginning of the last financial year. I'm STILL doing those two nights a week, Ive NEVER had any redrafting of my contract (to be honest no-one ever considered it, neither them nor I)

However, I faithfully did two nights a week last year up until christmas, where, just before, the other staff member who covers the other five shifts of the week, decided to drop down to four, and I was asked if I wanted to take up the spare one.

I agreed verbally with the (then, different) general manager (who has also since left the company) that yes from January I would step up to three shifts a week. And thus I have been doing till the lockdown. My wages each week are made up of 3 8-hour shifts at an hourly rate.

Again, if I want to I can refuse to do any extra shifts, I am not obliged to do them in my (verbally agreed) contract. The fact that I do, then, (and did quite a few last year to cover for a very ill colleague) is entirely out of my own "generosity"... it took me away from my other life commitments. Yes of course I got remunerated for them, and the rate was the same as for my "main" shifts.

But this is a far cry from considering me to be some sort of flexible-hours worker, because I'm not and never have been.

These terms were agreed in the years gone by with general managers of the time, without any problems whatever. It never occurred to me that helping the company out by covering sickness and holidays would come back to bite me.

If the government intends to stand behing 80% of my wages, why aren't I getting 80% of my wages? Its not as if they can't be calculated... they are fixed and utterly predictable.

mkboy

"they cannot pay you less, they have to pay you at least 80% of your reference salary"

So my question boils down to "what IS my reference salary"? I thought it was the three basic shifts that I agreed to do each week (same days, its not on any sort of rota either), and have been doing since January. I was expecting to get 80% of my rate for 24 hours work. I didn't get that much I got about £30 less per week paid to me as furlough pay.

When someone asks me what my job is I say "Working at the company three days a week"

In my circumstances, what is my employer legally required to pay me (regardless of what he can claim from HMRC) because in fact, he's paying only what he is claiming. And I think he is underclaiming. And so yes it does matter to me what he's claiming because thats all I get!

Jeremy535897

I think it is a very finely balanced situation. I think I would argue that your basic hours increased from 2 to 3 days, so you meet all the conditions in 7.5 and should be paid 80% of your salary for the last pay period before 19 March 2020. Nobody would suggest that someone who simply got a pay rise on 1 January was a variable pay employee, and equally therefore nobody should suggest that someone who increased the regular hours they worked every week, from one fixed number to another fixed number, from January was a variable pay employee. That is quite different from someone who works varying hours every week, or even from someone who works a minimum 20 hours a week but tops it up with varying amounts of extra hours each week.

mkboy

Thankyou Jeremy.

"I think I would argue that your basic hours increased from 2 to 3 days, so you meet all the conditions in 7.5 and should be paid 80% of your salary for the last pay period before 19 March 2020."

So.. like I said, they aren't. My question then is, who can I appeal to if they insist i'm only entitled to the money the way they have calculated it?

Who is the "guardian" of this new system?

Jeremy535897

HMRC. You can report an employer if you think they are abusing the system, but that is not your issue (it would be if they claimed 3 days but paid 2). The only option they give is to discuss the matter with your employer. Another option is to try ACAS.