Furlough

change of hours

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not sure how to deal with a furlough situation

a clients employee has been fully furloughed and is returning on flexible furlough. The employee is also cutting their normal hours voluntarily

they are variably paid but for illustration they worked on average 40 hours per week for 2019/20, their new reduced hours (if unfurloughed) would be 20 hours on average

when they come back to work they'll be working approx 10 hours and be furloughed for 10, but using the basis of 19/20 hours they would be furloughed for 30 hours

our client doesnt want them to receive furlough for time when they wouldnt ordinarily be at work going forwards, but there doesnt seem to be a way to adjust for this

are we missing something or is the employee just a winner in the system?

Replies (6)

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By Duggimon
25th Mar 2021 16:25

The furlough amount, as I understand it, is not variable, it's all or nothing, so if they work 10 hours and their reference pay is 40 hours, they get 30 under the CJRS, no more no less.

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By Wanderer
25th Mar 2021 16:45

Got one in a similar situation.
Reduced hours, put on Furlough. 80% of reference pay is far more than full pay on reduced hours.

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By Crouchy
25th Mar 2021 17:44

thanks for the replies, i guess the only way to avoid this anomaly in the syetm is to un-furlough and just pay actual hours

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Replying to Crouchy:
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By Wanderer
25th Mar 2021 18:06

Yes, but then no CJRS claim for unworked hours so both employer & employee may be worse off depending on how the numbers crunch.

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By Barbara G
25th Mar 2021 17:51

We've one the same too. Employee would get paid far more for being on furlough than when working. However, when we phoned HMRC to check what to do about change of contract and flexi furlough we were told, incorrectly, to reduce furlough based on new contract, which was wrong. Left us in a right sticky mess considering too late to back date furlough

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By Hugo Fair
25th Mar 2021 21:17

Unusual for me, but I disagree with all the replies to-date (not so much what they say which is generally correct but in terms of apparent assumptions that look like the wrong question has been answered).

Why? Because furloughing the employee and the employer making a claim under CJRS are being conflated into a single problem ... but they are quite distinct.

For instance, there is no reason why the employer shouldn't furlough the EE (with her/his agreement) in terms that suit both parties - such as pay based on 20 hrs/wk (and actual hours worked reduced to 10 pw). So far, despite the word 'furlough', this has nothing to do with CJRS.

Equally there is nothing that forces the employer to make a CJRS claim at all ... the costs (worked & furloughed) can simply be 'swallowed' in the usual way.

The rules determining the 'reference pay' are part of how to calculate the pay that can be claimed by the employer under CJRS - not part of what you must pay the EE (other than that the EE must be paid >= the CJRS claimed amount).

I'm not proposing a solution to OP, but hoping to ensure the basis of any decision is made on a clear understanding of the underlying facts.

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