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Any questions? I think my furlough pay is wrong: what should I do?
We regularly receive queries via our website. We do not give advice, but we try to signpost sources of further information and support. Some of the replies might be useful to others, so occasionally we will post them anonymously as ‘question and answer’ news items. We have received questions recently, such as the one below, on what to do if your employer has paid you the wrong amount of pay during your period of furlough.
⚠️ Please note: this is posted as a ‘news’ item, which means the information and links are not reviewed and updated. You should not rely on it without checking the full facts of your case with a tax or welfare rights adviser.
Question: I work for an employer who has furloughed me. The problem is that I don’t think they have calculated my furlough pay correctly. My wage varies from month to month – I get a basic amount and an extra amount for each day worked. My boss is only paying me (and therefore, I assume only claiming for) 80% of the basic element but the guidance states that any regular payments can be included. I've tried to raise it with him but I'm not getting anywhere.
Answer: The government have just updated the Job Retention Scheme guidance (as well as the underlying scheme rules) to be clearer on what is included in ‘regular’ pay.
The updated scheme rules (the Treasury Direction) can be found here: The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction
The updated guidance on working out 80% of your employee's wages can be found here: Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme
To the extent the amount you receive per day is something that doesn’t vary and is included in your contract and/or is always paid in reality, this would seem to fall under ‘regular’ pay.
The problem is, there are a lot of employers who will have made their calculations of furlough pay before this clearer/detailed guidance was published. The question of what constitutes regular pay has been one of the most unclear aspects of the Job Retention Scheme and there may be employers who have interpreted the previous guidance in all different ways.
There are serious ramifications if an employer does not pay out enough by way of furlough pay (that is, where they have paid out less than the ‘reference pay’ as calculated under the scheme rules). Indeed it could mean that the employer is not actually eligible to make a claim for a grant from the Job Retention Scheme as explained in this House of Commons briefing.
Currently, however, HMRC have not confirmed what employers should do in cases where their calculations are wrong, which is leaving some employers in a difficult and uncertain position. We are continuing to raise this general issue with HMRC.
It may be that the employer completely accepts there is an error and will respond to you once they have received guidance from HMRC about how to correct the error. If they don’t, then you may want to direct them to the House of Commons briefing which highlights the serious position.
If you think that the employer hasn’t made a mistake with the calculations and has just decided to keep a portion of the money received from HMRC for themselves without passing it on to you, there is a reporting facility here: HMRC Fraud Hotline - Information report form
Although not expressly intended for this purposes, we don’t see any reason why this couldn’t also be used to report an employer who ultimately refuses to adjust incorrect calculations – but only once HMRC’s instructions on how they should do this have been issued and with a reasonable amount of time allowed to follow them.
Contact: Meredith McCammond (click here to Contact Us)