Pay cuts and furlough

moneybags82

I’m hoping someone can help with a furlough query I have. My employer has announced it’s entering into consultations with everyone to take pay cuts for the next 12 months to prevent redundancies. 

If anyone is still being furloughed after the pay cuts come into effect will their furloughed pay be calculated based on the new salary or salary prior to the outbreak?

thanks for reading 

Grumpy_chap

Furlough is calculated on pay before coronavirus

Jeremy535897

moneybags82 said:

I’m hoping someone can help with a furlough query I have. My employer has announced it’s entering into consultations with everyone to take pay cuts for the next 12 months to prevent redundancies. 

If anyone is still being furloughed after the pay cuts come into effect will their furloughed pay be calculated based on the new salary or salary prior to the outbreak?

thanks for reading 

Furlough is based on dates no later than 5 April 2020, so any pay change now should not affect what they can claim, although of course they will start to pay part of furlough pay from August.

[Deleted User]

One thing to factor in is how long you will be kept on furlough. Up until now it has only cost accrued holiday pay, but from August it gets progressively more expensive, rising to 39% of base salary even if not topped up (59% with top up, or more if they top up beyond £2,500) for the final October payment and costing 19% of base salary even without top up in August. 

With that in mind I suspect that the company may be looking to introduce cuts which mean that they can bring people back and hopefully make them productive, rather than having an ever increasing cost for people sat at home doing nothing. The pay cuts are highly likely to be a prelude to bringing the entire workforce back and not having anyone remain on furlough.