Furlough

Jeremy535897

There is a misconception here. The above question needs answering, but even if you are a variable pay employee, the calculation you use is wrong, because it is using periods after 5 April 2020. It should be as follows:

"If your employee started working for you on or after 6 April 2019, you should not include the days before their employment started in your calculation.

To work out 80% of your employee’s average earnings for an employee who started working for you on or after 6 April 2019:

1. Start with the amount they earned in the tax year up to the day before they were furloughed.

2. Divide it by the number of days they’ve been employed since the start of the tax year – including non-working days (up to the day before they were furloughed or 5 April 2020 – whichever is earlier).

3. Multiply by the number of furlough days in this pay period.

4. Multiply by 80%.

Every day after the employee commenced employment with you is counted in making this calculation. This includes non-working days.

Find an example of working out 80% of average wages for the last tax year if employment started after 6 April 2019. "

Unfortunately SSP is included in working out the average, but it is different if you are a fixed rate employee, when the calculation is based on what you would normally have been paid for the last pay period ending before 20 March 2020.

Doubleshotdamo

Your company has to pay you full pay for annual leave, not claim furlough and top you up, that's fraud. 

Grumpy_chap

Doubleshotdamo said:

Your company has to pay you full pay for annual leave, not claim furlough and top you up, that's fraud. 

I don't think this is correct.

poppy12345

Doubleshotdamo said:

Your company has to pay you full pay for annual leave, not claim furlough and top you up, that's fraud. 

Yes they have to pay 100% of earnings while on annual leave but they can claim furlough for the 80% and top it up by the extra 20%, nothing wrong with that at all and certainly isn't fraud.

barr012

I was wondering the same. My employer has been using furlough to pay staff when on holiday. They are not using furlough for any other reason. We are very busy and are taking on new staff. Seems like an abuse of furlough to use it in this way. Can't find any info on whether it's legal or not 

MattMattMattUK

barr012 said:

I was wondering the same. My employer has been using furlough to pay staff when on holiday. They are not using furlough for any other reason. We are very busy and are taking on new staff. Seems like an abuse of furlough to use it in this way. Can't find any info on whether it's legal or not 

It was previously legal and allowed by the scheme, but I think that loophole was changed in June or July last year. If an employer is claiming CJRS funds for an employee on annual leave that is prohibited by the rules of the scheme.

Jeremy535897

Actually, it was never allowed. The rules were that you could ask furloughed employees to take holiday while they were on furlough, but you could not furlough them specifically to take holiday and for no other purpose, because that did not meet the criterion that the furlough was due to coronavirus. It was specifically highlighted in later guidance, with the example given that if a business shut down every year at Christmas for example, and all the employees went on holiday, they could not furlough people for the same shut down in 2020.