CJRS v NMW - Shall I cry now or later

Do we apply the new NMW on Furlough for next month

Didn't find your answer?

I thought I had got grips with this that Furlough is calculated on historical info. But there are always those that know better . One employee has a screen shot  from HMRC saying the NMW applies.  So far via HMRC I have have had three separate answers. 1. Yes you apply new NMW. 2. No. Its based on historical info. 3. There is no clear guidance - use your own judgement.

It must be a first that HMRC have told me to "use my own judgement"

 

Replies (6)

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By ann domonkos
22nd Apr 2020 14:00

From HMRC site :Individuals are only entitled to the National Living Wage, National Minimum Wage or Apprentices Minimum Wage for the hours they are working or treated as working under minimum wage rules.

This means that furloughed workers who are not working can be paid the lower of 80% of their wages or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage.

However, time spent training is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020. As such, employers will need to ensure that the furlough payment provides sufficient monies to cover these training hours. Where the furlough payment is less than the appropriate minimum wage entitlement for the training hours, the employer will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time.

Where a furloughed worker is paid close to minimum wage levels and asked to complete training courses for a substantial majority of their usual working time, employers are recommended to seek independent advice or contact Acas....
t

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Replying to ann domonkos:
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By newmoon
22nd Apr 2020 15:06

ann domonkos wrote:

From HMRC site :Individuals are only entitled to the National Living Wage, National Minimum Wage or Apprentices Minimum Wage for the hours they are working or treated as working under minimum wage rules.

This means that furloughed workers who are not working can be paid the lower of 80% of their wages or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage.

However, time spent training is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020. As such, employers will need to ensure that the furlough payment provides sufficient monies to cover these training hours. Where the furlough payment is less than the appropriate minimum wage entitlement for the training hours, the employer will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time.

Where a furloughed worker is paid close to minimum wage levels and asked to complete training courses for a substantial majority of their usual working time, employers are recommended to seek independent advice or contact Acas....
t

Ann: please could you enter the website link for this? Thanks

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blue sheep
By NH
22nd Apr 2020 14:11

the guidance could not be clearer on this - NMW only applies when there is actual time spent working, that time is then compared against the NMW rates.
On furlough no one is working, ergo no NMW

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By Matrix
22nd Apr 2020 15:13

No, the employer has to pay at least 80% of the pay during furlough, where 80% is the higher of the 12 month average pay and the equivalent month last year. I don’t see where NMW comes into it.

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blue
By mg200
29th Apr 2020 19:20

The only time when NMW is relevant is if the employee is continuing to do some training i.e. an apprentice.

However it is far more likely that the furlough payment more than covers the few hours that they are required to do. Despite this I have a client who is insisting they have to top up their wage for the hours of traning done x20% of NMW. This isn't the case but as it adds up to £2.50 I'm letting it go.

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