Employer paying less than contracted hours

skyela

Good afternoon,
I was just looking for some opinions on my situation please.
I started a job in October 2018 averaging about 10 hours a week.
In Jan 2020 my job role changed within the same company and I was put on a 20 hour contract. Although I would probably be looking at 30 hours + if I was not on furlough right now. 
However when we was furloughed on the 25th March the company agreed to pay 100% of our wages so I was getting £180 a week furlough. 
We was told that now they would not be topping our wages up to 100% we would now only get 80% so I was under the impression I would be receiving about £144 a week. 
However I received about £74, when I queried this with head office, I was told that our furlough payments was now based on an average of our earnings over the last year. Obviously this is when I was on less hours (doing a different job role). 
Is this correct? I'm guessing they do not have to honour the 20 hour contract I signed in January?

Thank you for any help 

Jeremy535897

Your reference to 30 hours plus indicates you hours vary regularly, so you don't get a regular monthly salary. That means you are a variable pay employee, and your employer has to follow the guidance that says:

"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)

To calculate 80% of the same month’s wages from the previous year:

1. Start with the amount they earned in the same period last year.

2. Divide by the total number of days in this pay period - including non-working days.

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

4. Multiply by 80%.

Find an example of claiming for the same period last year.

To work out 80% of the average monthly wages for the last tax year:

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 from 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%.

Find an example of working out 80% of average monthly wages for the last tax year. "

From https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

If you got paid for 10 hours every month up to January 2020, and got paid for 20 hours every month from then, it would be different.

skyela

Thanks for your reply. You are correct that my hours will and do vary every month. Although in theory if I was working and this wasn't going on I would of had a minimum of 20 hours.

Without going into too much life detail, my life circumstances dramatically changed in October of last year and I no longer have two incomes coming in. Therefore I can't rely on the £74 a week. I have a mortgage ( although I appreciate I could take a payment holiday on that) but it still wouldn't my household bills and food etc if this is ongoing. I'm unsure what my next step is? 
I'm applying for other jobs and my own workplace is not open as yet. 

poppy12345

skyela said:

Therefore I can't rely on the £74 a week. I have a mortgage ( although I appreciate I could take a payment holiday on that) but it still wouldn't my household bills and food etc if this is ongoing. I'm unsure what my next step is?

You can look at claiming Universal Credit by putting all your details into a benefits calculator. You won't receive any help (benefit wise) for your mortgage because you need to be claiming UC for 9 consecutive months with zero income. https://www.entitledto.co.uk/

A claim for UC will end any tax credits you may already be claiming.

Savings/capital of £16,000 and over will exclude you from claiming.

Jeremy535897

You have two approaches you could take. The first is to look at the furlough agreement you agreed. (Remember that the figure your employer claims under the CJRS in respect of your net wage is the minimum they must pay you, not what they have to pay you, which is in your contract of employment as amended by the furlough agreement.) What does it say about your pay? I ask because if they furloughed you on 100% and based your pay for that on your 20 hours, why are they changing it to 80% of the average wage now? I wonder what they claimed for you when they paid you £180 (you can only find out by asking)? If they used 20 hours then, why can't they keep doing it? HMRC presumably accepted it, and they should do so, because your situation is one where using a fixed rate employee calculation might be "reasonable" and thus acceptable to HMRC.

The next approach is to get technical. Your situation is one of those cases where you are "in the middle". At one end of the scale is a fixed rate employee who gets paid £200 a week no matter how many hours they work. At the other end is a zero hours contract variable pay employee who might work 5 hours one week and 40 the next, and be paid at different rates depending on the nature of the work and its timing.

The technical definition of a fixed rate employee (which is what you want to be) is in paragraph 7.6 of the Treasury Direction, which says:

"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." See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/886959/CJRS_DIRECTION_No2___20_05_2020.pdf

If you are an employee entitled to an annual salary for a 20 basic hours week, get paid on a regular basis, and your basic hours do not normally vary, my opinion (and I am not a lawyer) is that the fact that you may do regular overtime as well does not of itself stop you being a fixed rate employee and thus the claim for your wage should arguably be based on 80% of the pay you received in the last pay period on or before 19 March 2020 (and if that happened to include overtime, you would include that too). The big problem is persuading your employer that this is the correct description of your pay in your employment contract as amended by the furlough agreement, rather than the default position of the variable pay calculation, which nearly every employee falls back on in cases like yours.