CJRS usual wages and usual pay

Usual wages and usual pay for employees who were eligible under CJRS

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Perhaps I'm a bit too early with my question, but looking at the updated guidance for extended CJRS issued today, I'm confused at what is meant by "for employees who were previously eligible for CJRS the calculation rules will remain the same"  The existing CJRS calculation of 80% of usual wages and usual hours will apply............    What is meant by usual wages and usual hours?  Is it the calculation for the previous tax year, or the same period the previous tax year, whichever is the higher, as has been used for calculation of JRS up to the end of October?  Which means that anyone who received a pay rise or had their hours increased during this new tax year will be disadvantanged.  I can't find clarification on what period usual hours and usual wages applies to. Can anyone?

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By kathyk0410
05th Nov 2020 14:46

Which guidance are you looking at? I couldn't find anything when I looked earlier other than it would be issued shortly.

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By Barbara G
05th Nov 2020 14:57

Hi
I'm just looking at the guidance issued today about an hour and a half ago. Page 7 section 4.1 What is meant by "usual" hours and "usual" wages?

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Replying to Barbara G:
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By kathyk0410
05th Nov 2020 15:29

Ok this is what I was dreading as it means that for 2 employees: one employed pre-March, doesn't even need to have been furloughed, and one post-March will have different reference pays. For pub staff, it means that the NMW increase will massively boost furlough pay for new staff. Also when the pubs reopened in July quite a few changed their hours and others had pay rises. Could see that it would make sense if someone had been furloughed all the time but not if they hadn't been since the start of July. Having to wait until 10/11 is a bit annoying but yes I agree with your interpretation. Not sure this is going to go down well with clients!

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Replying to kathyk0410:
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By Barbara G
05th Nov 2020 15:55

I've finally got through to HMRC webchat and yes it does seem to be the case. Previously furloughed then last tax year as a reference period applies. Some employers have staff who have increased their hours from August onwards, but now will be paid less furlough than their contemporaries who started recently and work less hours. Doesn't seem fair at all but just wanted to get it checked out to be sure

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Replying to Barbara G:
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By Paul Crowley
05th Nov 2020 16:00

Stupid arrangements
Were these what Rishi decided or left to HMRC?

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Replying to Barbara G:
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By kathyk0410
05th Nov 2020 16:47

Thanks for confirming - it's crazy as I think they'll have to top up (legally they don't have to) so that they get paid the same so as not to start a confrontation. There was a 6.2% increase in NMW for over 25s so this alone will make a huge difference.

The guidance also says that the employee just needs to be eligible for furlough so it just whether they were employed in March 20 and eligible not necessarily previously furloughed. We do have employees that weren't furloughed first time around but are now. So again go back to previous years earnings.

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Replying to Barbara G:
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By kathyk0410
05th Nov 2020 16:53

Duplicate - rubbish internet in the Kingdom

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Replying to kathyk0410:
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By kathyk0410
05th Nov 2020 17:44

Also, what are we supposed to do where an employee has reduced their hours - not necessarily related to COVID19 though no doubt they will say it is - do they get the higher furlough - so for full furlough could, in fact, be higher than their usual pay? March to October is too long a period for changes not to have happened.

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Replying to kathyk0410:
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By Barbara G
05th Nov 2020 18:36

I had a scenario like that during September. An employee asked to have working hours reduced. I contacted HMRC (by phone or webchat, I can't remember which) and was told to reduce the flexible furlough hours to reflect the reduction in contracted hours. I then had a similar scenario in October for another employee and contacted HMRC again, by webchat, just to make sure I was doing the right thing, only to be told in the original case I should not have changed the flexible furlough hours to reflect change in contract, and therefore what I had done was wrong. So what do we do here, who do we believe, or do we just make it up as we go along?

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Replying to Barbara G:
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By NYB
05th Nov 2020 18:51

This goes to prove web chat and telephone calls are hopeless. Personally I would have just continued with the original Furlough calculation. The Furlough was based on the "past" and not the "current" - hence the NMW argument

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Replying to Barbara G:
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By kathyk0410
06th Nov 2020 09:59

Think there has been a bit too much - well the guidance doesn't really deal with this ...... so let's just do what we think is reasonable! HMRC have no way of understanding each different scenario so I don't really blame them but it doesn't make our job easy.

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By Barbara G
05th Nov 2020 15:08

I think I might know where the guidance might be. Could anyone direct me to the link which refers to CJRS calculations as applied in August 2020 for reference pay and usual hours? Apparently that's where the answer is.

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Replying to Barbara G:
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By NYB
05th Nov 2020 15:14

Its what came out on Sunday isnt it and what came out originally in August. They quickly got that out as the principle is the same as AugustThroughout Furlough they sent out guidance every month. August calculation on wages/hours was the original calculation we worked on from April . The difference in August was that no NIC/pensssion was claimable.I dont think the Furlough calculation changed.

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By Barbara G
05th Nov 2020 15:20

Thanks, it's just in case I'm missing an update or something. The second paragraph above point 4.1 which commences "All employees........." As it refers to employees and not employers or claims, I'm just wondering did the reference period for calculating hours and pay change from August? I know pension and ER NI couldn't be claimed anymore. So do you think the calculation based on pay during the previous tax year still stands? Many clients querying this at the minute

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