Is this furlough pay correct?

[chrissy]

Hi,as an employee who has not been furloughed yet but 50 of my co-workers have,what should we be getting paid by our employer?

contracted to 38 hours but required to work overtime usually 50+ hours per week total and consistently so for the last 3 years at least.

for the last 4 weeks we have been on 38 hours due to a decline in work

employer is currently paying furloughed workers normal hourly rate minus 20% x 38 hours, is this correct?

or should it be the average over the last tax year -20% and capped at £2500 per month?

we are weekly paid

Chris

 

[Surveyor]

Looking at the latest guidence non-discretionary (contractual) overtime is included in calculating the 80%. Voluntary overtime would not be included.

https://www.gov.uk/guidance/work-ou...-through-the-coronavirus-job-retention-scheme

What to include when calculating wages

The amount you should use when calculating 80% of your employees’ wages is regular payments you are obliged to make, including:

• regular wages you pay to employees
• non-discretionary overtime
• non-discretionary fees
• non-discretionary commission payments
• piece rate payments

 

[Maccapacca]

The reduction of 20% has to be agreed iirc with the employee they can't just be knocking 20% because they are getting 80% without agreement.

In another round of furlough the next 80% could be 80% of 80% depending on how it's measured.

 

[Sam__]

It is typically contracted hours. So if the overtime is mandatory/contractual then it should be included.

I'm on furlough getting 80% of my salary. Luckily it's a simple one with no overtime but you do have to sign an agreement on both sides at point of furlough so make sure to read the small print.

 

[chrissy]

Sorry, not a reduction of 20% but 80% of what we would have got ordinarily, i think they have worked this out wrong, this should be 80% of average not 80% of basic which would make a reasonable difference to take home pay.

Yes overtime is mandatory

 

[Sam__]

Sorry, not a reduction of 20% but 80% of what we would have got ordinarily, i think they have worked this out wrong, this should be 80% of average not 80% of basic which would make a reasonable difference to take home pay.

Yes overtime is mandatory

Also be aware of the upper limit of 30k. So if the salary is over 37.5k then there will be a greater reduction in take home pay.

 

[chrissy]

They are applying this across everyone weekly paid equally, not seen anything about an upper limit, how does it apply? do you mean the £2500 cap?

 

[Sam__]

They are applying this across everyone weekly paid equally, not seen anything about an upper limit, how does it apply? do you mean the £2500 cap?

Yes that cap. But it will still be taxed/NI etc so take home will be closer to 2k.

 

[chrissy]

yes, understood, but with overtime included it will make it more bearable than it is at the moment as basic only.

 

[muon]

The reduction of 20% has to be agreed iirc with the employee they can't just be knocking 20% because they are getting 80% without agreement.

In another round of furlough the next 80% could be 80% of 80% depending on how it's measured.

How does furloughing actually work? Can they do it to anyone? Surely my notice period is supreme. I must get 100% of pay for the notice period.

I don't understand why people are agreeing to pay cuts.

 

[cheesyboy]

How does furloughing actually work? Can they do it to anyone? Surely my notice period is supreme. I must get 100% of pay for the notice period.

They can't furlough you without your agreement.

Well, they probably can, but they'd still have to pay you 100% of your wages (topping up the 80% the government reimburses), unless you agree to the reduction.

At our place, we're topping the furlough amount on the staff that have been furloughed, so that they receive 100% whilst not working.

 

[muon]

They can't furlough you without your agreement.

Well, they probably can, but they'd still have to pay you 100% of your wages (topping up the 80% the government reimburses), unless you agree to the reduction.

At our place, we're topping the furlough amount on the staff that have been furloughed, so that they receive 100% whilst not working.

I feel many people have been conned into accepting a paycut. It's not up to employees to protect the profits of a company if they aren't gonna go under.

 

[cheesyboy]

I feel many people have been conned into accepting a paycut. It's not up to employees to protect the profits of a company if they aren't gonna go under.

Agreed.

Of course, they can just make you redundant instead, if you don't agree to furlough. They'd still have to pay you for your notice period and any statutory, or contractual, redundancy pay, though.

 

[Rroff]

How does furloughing actually work? Can they do it to anyone? Surely my notice period is supreme. I must get 100% of pay for the notice period.

I don't understand why people are agreeing to pay cuts.

The idea is that furlough in is lieu of being made redundant - and essentially is so that companies can defer any redundancy decisions until later down the line.

Basically so that companies aren't forced by the current circumstances to get rid of people who they would rely on in normal times to keep the company running to try and prevent companies from collapsing before they have a chance to get on their feet again if/when things return to normal.

EDIT: Plus as cheesyboy said above if you don't agree - it isn't something an employer can force on you but the alternative options might not be very attractive.

 

[Trifid]

I don't understand why people are agreeing to pay cuts.

Working for 80% of pay is a different prospect to being paid 80% for not working. The not working option becomes even more tempting if you have any travel expenses.

 

[Surveyor]

yes, understood, but with overtime included it will make it more bearable than it is at the moment as basic only.

If your employer hasn't included contractual overtime in working out your 80% then you need to have a word.

The answer still can't be more than £2,500/month though (£576.92/week).

If you basic pay is £2,000/month plus £1,000 contractual overtime you'll reveive £2,400/month gross (80% of £3,000).

If your basic pay is £2,000/month plus £2,000 contractual overtime you'll receive £2,500/month gross (80% of £4,000 (£3,200) but capped at £2,500).

If your basic pay is £3,125/month or more you'll receive nothing for your contractual overtime as 80% of £3,125 is £2,500 and that's the maximum you can get.

You don't have to agree to be furloughed on 80% pay but then you run the risk of redundancy.

 

[Surveyor]

Double post.

 

[UltraSBM]

If your employer hasn't included contractual overtime in working out your 80% then you need to have a word.

The answer still can't be more than £2,500/month though (£576.92/week).

If you basic pay is £2,000/month plus £1,000 contractual overtime you'll reveive £2,400/month gross (80% of £3,000).

If your basic pay is £2,000/month plus £2,000 contractual overtime you'll receive £2,500/month gross (80% of £4,000 (£3,200) but capped at £2,500).

If your basic pay is £3,125/month or more you'll receive nothing for your contractual overtime as 80% of £3,125 is £2,500 and that's the maximum you can get.

You don't have to agree to be furloughed on 80% pay but then you run the risk of redundancy.

I respectfully disagree there.
You can pay your staff whatever you want, however the government will only give the company back a max of £2,500 per month, or 80% of the wage...whichever is lower.

 

[Surveyor]

I respectfully disagree there.
You can pay your staff whatever you want, however the government will only give the company back a max of £2,500 per month, or 80% of the wage...whichever is lower.

Of course you're correct. Your employer could pay you double or ten times your pay if they wanted to.

That doesn't really help the OP though who was asking about how the 80% the government is funding is calculated as that's all his employer is offering.