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Furloughed Employees Pay Based on

Changed staff Contract on 16/3 to reduce days from 1/4. Can i furlough on new rate?

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I am a small company with one director & 1 employee. Before the Furlough guidance was released I made the decision to reduce my employee from 5 days to 3 days per week given the current situation & also lost a big client at the end of 2019 so money has been tight. This was effective from 1st April to provide notice to my employee.

Currently employee is on SSP as in 2 weeks self-isolation till 31/3. I have a phone call meeting scheduled on 31/3 and if my employee is well enough - I wish to notify the employee that they will become furloughed and discuss the process & any concerns they have.

I have read online it is based on last month’s money being March in my case. Am I just is saying it will be based on the new employment contract that I issued before furlough was even announced as a government scheme?

I have gone from having income to no income and reducing the employee days was a way to help my cashflow & hopefully the business survive this time. I won't be able to top up to 100% as no income coming into the company.

Thanks in Advance


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By Duggimon
27th Mar 2020 11:00

We don't yet know the details on how the funding will be secured, though it seems to be based entirely on previous submissions via the PAYE scheme. Presumably as your employee's new contract was effective from 1 April, there are no PAYE submissions reflecting the reduced rate.

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By paul.benny
27th Mar 2020 11:36

The guidance (see link below) explains the basis for the furlough subsidy. As I read it, you can probably pay your employee based on their full-time earnings.

We're nearly all up s..t creek together here. Aim to do the best you can for your employee.

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By WuTangFinancial
27th Mar 2020 12:02

The guidance states
"For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included."

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By jo.steinbergs
27th Mar 2020 15:06

Thanks for your replies. paying the higher salary of Feb in advance of getting 80% back means its an even bigger cash flow issue.

Thanks again and stay strong thorugh these tough times!

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