If an employee is earning, say, £2,000 per month as at 28 Feb on the payroll, per the Coronavirus Job Retention Scheme we would be able to claim 80%, or £1,600.
What if, subsequently in March 2020, the pay for the employee in question was increased from £2,000 to £2,500. Would we be entitled to make claims for £2,500 (80% being £2,000; an extra £400 per month), or would we be limited to using the £2,000 per month as the "cost basis"?
This is a hypothetical example based on a real situation, but I understand this could also be used to exploit the system, and hence I am skeptical it is possible...
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Everyone's wages would suddenly rise to £3,125 per month on the date of furlough if that were the case.
Furloughed pay is based on historical information, that much is clear from the guidance. From that I would infer it will not take into account any future wage rise, even if all above board, documented, and signed in triplicate before the measure was announced.
Yeah we've presumed exactly that even though we've got clients whose staff were legitimately due a pay rise in March - win some lose some, I guess!
The furlough amount is calculated at 80% of the higher of the average wage over the last 12 months (or since employment started if less than 12 months) to 29th February 2020 or the pay for the same period last year. You cannot account for pay rises given in March 2020. The government have done this to minimise exploitation of the system.
Hello
No, the claim is limited to 80% of the reference pay so £1,600 (being 80% of the Feb 28 earnings).
Hello
No, the claim is limited to 80% of the reference pay so £1,600 (being 80% of the Feb 28 earnings).