Furlough Pay in May vs April - Calculation Method

czajunia

Hello,

For those working irregular hours do you know if the furlough pay is recalculated every month or should it be locked to the initial calculation from the starting month (April)? I know that government guidelines have been changing but I was under the impression that the amount would be locked to the 12-months average before the 28th February 2020 (or it would be the corresponding month from the previous year, whichever is higher).

Since I work irregular hours I got my furlough pay in April based on my average hours from previous 12 months up to end of Feb 2020, which made sense. However my pay for May is lower than last month which would indicate that the average has been recalculated. 

Essentially I would like to find out if the pay for May should be the same as in April or is it actually based on average hours from April 2019 - April 2020? 

Many thanks for your help.

Jeremy535897

If you are a variable pay employee, your employer can claim CJRS grant 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)"

Early claimants in April based pay using 2019/20 pay up to the last pay period before 29 February 2020. That has since changed to include pay periods ending before 19 March 2020.  The rules now state that you use 2019/20 average monthly wages up to the date you were furloughed. If they are simply averaging the whole of 2019/20, the average will be brought down by including your first furlough pay. This is incorrect. See:
https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

czajunia

Thanks.
I was furloughed on the 20th of March but get paid monthly on the 25th of each month. Does it mean that even under the new rules you mentioned in your post my pay should still be based on the period until the 29th Feb 2020? Or should it now be based on the 12-months period until the 31st March? It's a bit confusing as my pay date is after the date I was furloughed. Or should it just be an average for the whole 2019/2020 tax year?

Also, do you know if my pay should be the same in June as in May or is it gonna be recalculated again?

czajunia

Can I please ask further advice. Do you know what happens if I someone has worked for the same company but changed the contract within last year due to a role change? This is what happened in my case and my payroll team just advised me that I am only supposed to get furlough pay on the latest position. Which is a bit unfortunate as I did quite a lot of hours last year that will not be included in the calculation due to the role change. I also worked dual role for a while but I am not sure if this is relevant. 

Do you know if in such case the calculation for my furlough pay should be based on the average based on both roles or just the latest one ignoring the hours I did earlier in the year?

Thank you very much for your help.

Jeremy535897

The answer to your first question, which I must have missed, is that you average up to the date you were furloughed (otherwise you would be averaging furlough pay already received). If at 19 March 2020 you were a fixed rate employee as defined, it does not matter that you might have done a different role in the past or had variable pay in the past.

czajunia

Jeremy535897 said:

The answer to your first question, which I must have missed, is that you average up to the date you were furloughed (otherwise you would be averaging furlough pay already received). If at 19 March 2020 you were a fixed rate employee as defined, it does not matter that you might have done a different role in the past or had variable pay in the past.

No, I wasn't on a fixed rate when furloughed. My both roles had variable hours and differ every month. 

czajunia

Does it make a difference that I was still working irregular hours when I was furloughed?

And I guess now my question would be - shall the calculation include the whole year prior to being furloughed or just the average from the time I changed the role? 
Many thanks.

swallace9898

I was furloughed by my employer but he ended the furlough after 18 days and is refusing to pay for the period. He says I don't qualify because it was less than 3 weeks. Am I legally entitled to payment as I signed agreement to be furloughed?

hb2

swallace9898 said:

I was furloughed by my employer but he ended the furlough after 18 days and is refusing to pay for the period. He says I don't qualify because it was less than 3 weeks. Am I legally entitled to payment as I signed agreement to be furloughed?

Your employer has a duty to pay you according to the terms of your contract. What they can claim from HMRC is a different matter and shouldn't need to be any concern of the employee.

Jeremy535897

czajunia said:

Does it make a difference that I was still working irregular hours when I was furloughed?

And I guess now my question would be - shall the calculation include the whole year prior to being furloughed or just the average from the time I changed the role? 
Many thanks.

If you are a variable pay employee, and you probably are if your hours always vary, you should be paid at least 80% of the higher of your pay in the equivalent calendar period last year, and your average pay for 2019/20 up to the date of furlough, capped at £2,500 a month, if your pay is to meet the minimum required by CJRS.

czajunia

Jeremy535897 said:

If you are a variable pay employee, and you probably are if your hours always vary, you should be paid at least 80% of the higher of your pay in the equivalent calendar period last year, and your average pay for 2019/20 up to the date of furlough, capped at £2,500 a month, if your pay is to meet the minimum required by CJRS.

Thank you for the confirmation. That's what I thought as well after reading the government guidelines on their web site. However I got confused as my employer says something completely different claiming they are acting according to the HMRC rules. They say I am a salaried employee and only agree to calculate my furlough pay based on my contracted hours. I do have a low hour contract with them but I always work more hours than I am contracted. I don't think there was a single month I worked contracted hours only.

Now what happens if I moved from one position to another in August? It was still the same contract with minimum hours but working and getting paid for more. I just moved to a different role with a slight hourly rate bump. Should they still consider the equivalent calendar period from last year to compare it to the average or just ignore my old role altogether and make all the calculations as if I started working for the company in September? Or is the fact that I've changed the role irrelevant in such altogether?

I am sorry for a long-ish post but I just wanted to make it as clear as possible to avoid confusion. I am really not sure what to think since my employer seems to apply completely different interpretation of the government guidelines.

Thank you so much for your help.