CORONAVIRUS JOB RETENTION SCHEME- HOW DO I CALCULATE MY EMPLOYEES WAGES?
Under the Government Coronavirus Job Retention Scheme employers can claim a grant for 80% of an employee's wages (up to £2,500 per month). To enable an employer to claim this the employee must be:-
- employed by the employer prior to the end of February 2020
- furloughed and
- do no work for the employer.
Calculating 80% of an Employees Wage
This is simple where an employee has set hours or a set wage. This will however become more difficult for employers where an employee has irregular hours.
Where an employee has irregular hours the Scheme guidance states that where an employee has worked for the employer for a full 12 months before the claim, the employer should use the higher of the employee's earnings from the same month in the previous year or the employee's average monthly earnings from the 2019/2020 tax year.
The Scheme guidance states that if the employee has not worked for the employer for a full 12 months before the claim, the calculation should be based on their average monthly earnings since they started work.
If this is a very new employee (i.e. one who started working in February 2020) the Scheme guidance states that employer should simply use a pro-rata for the employee’s earnings so far as an indication as to what that employee would have earned in a month.
If you require any advice please do not hesitate to contact Sally or Steve to discuss:
Steve McLaren
Sally McCartney
We are able to assist remotely by email during this period of self-isolation and social distancing.
Sally McCartney. Employment and Litigation Partner
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