Furlough pay calculation

RDPearson

Hi all

I have an issue with my pay over the last few months. The company thinks they are doing it right but I disagree and am trying to get more info.
I was furloughed for 3 weeks in May so received lower pay which is normal. However I was also furloughed briefly in June and also in July and this is where the problem comes in. The company is working out furlough pay based on the average of the last 12 months pay. The last 12 months for June include the reduced amount for being furloughed in May, and July is including the reduced amount for May and also June. 

So they are not basing it on my actually salary, they are basing it on an average of the last 12 months. So each month I am getting less and less, not the 80%.
As an example say I am getting £100 a week for easy numbers. So May I would have got paid £100 + (£300 * 80%) = £340. They July salary would have been worked out on a salary of £97.70 a week. So £97.76 + (£293.10 * 80%) = £332. Moving onto July worked out on £96.57. So £96.57 + (£289.71 * 80%) = £328.34.

The above example is simplified so the month containing exactly 4 working weeks and being furloughed for 3 of them. This is just to try explain easier.

So each month it is going down and down. July the furlough rate is actually 77% of the salary not 80%.

This doesnt seem right to me. Can anybody clear this up for me or point me in the right direction to get the correct info so I can get my pay sorted?

Thanks in advance

Jeremy535897

When you use the average pay method, ignoring the £2,500 cap, you take 80% of the higher of:

• your pay for the equivalent calendar period in the previous year, and
• your average pay for 2019/20 up to the date you were first furloughed

See https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme#work-out-80-of-your-employees-usual-wage

RDPearson

With me being a fixed salaried employee surely there should not be any such averaging? It should be 80% of my actual salary?

Jeremy535897

If you are a fixed rate employee, then the CJRS claim should be (ignoring the £2,500 cap) 80% of the wage you received for the last pay period ending before 20 March 2020. In other words, it should only vary due to the length of the furlough period.

Employers who pay less than 80% of this "reference salary" to an employee cannot claim CJRS in respect of that employee.

RDPearson

Thank you. Thats what I thought. Now to try get them to correct my pay for June and July

hb2

Even if your pay varies, your furlough amount is set and shouldn't change after the first payment (except for things like holiday and days worked under the flexi scheme).

Jeremy535897

hb2 said:

Even if your pay varies, your furlough amount is set and shouldn't change after the first payment (except for things like holiday and days worked under the flexi scheme).

Not necessarily, as the amount paid in the equivalent period in the previous year may be relevant, and will change.

hb2

Jeremy535897 said:

hb2 said:

Even if your pay varies, your furlough amount is set and shouldn't change after the first payment (except for things like holiday and days worked under the flexi scheme).

Not necessarily, as the amount paid in the equivalent period in the previous year may be relevant, and will change.

Thank you. I thought I had got my head round the rules, but obviously not!

Jeremy535897

hb2 said:

Jeremy535897 said:

hb2 said:

Even if your pay varies, your furlough amount is set and shouldn't change after the first payment (except for things like holiday and days worked under the flexi scheme).

Not necessarily, as the amount paid in the equivalent period in the previous year may be relevant, and will change.

Thank you. I thought I had got my head round the rules, but obviously not!

Yes, guidance says:

"Employees whose pay varies

You should calculate 80% of the higher of either:

• the wages earned in the corresponding calendar period in the tax year 2019 to 2020
• the average wages payable in the tax year 2019 to 2020

If your employee has variable hours you will have completed a similar comparison to work out their usual hours but the outcome may be different."

The second bullet point should actually say average wages 2019/20 up to date first furloughed.