Coronavirus Staff’ Assist
Note. The furlough scheme closed to new entrants (ie, employees who haven’t previously been furloughed) on 10 June 2020. We’ve left this information here for supply teachers who are on furlough, but who are still getting furlough wages that don’t include their bonus payments.
In normal times, supply teachers working for agencies and umbrella companies in England and Wales (it doesn’t work this way in Scotland or Northern Ireland) often have their pay structured as ‘minimum wage plus discretionary bonuses’. This is done to allow continuity of employment, but different pay rates depending on the job that is being done.
However, this structure causes a problem under the furloughing rules. Discretionary bonuses are not included in furlough pay, so many umbrella agencies (not all – I’ve heard reports of some who simply aren’t contacting staff, and some who have always paid the full amount) who are furloughing teachers are basing the 80% of salary when furloughing on just the minimum wage – meaning very low incomes.
Yet, HMRC did change its guidance – you can see it in situ on the Government’s ‘Work out 80% of your employees’ wages’ page. The key paragraphs are:
“When you’re working out if a payment is non-discretionary, only include payments which you have a contractual obligation to pay and to which your employee had an enforceable right.
“When variable payments are specified in a contract and those payments are always made, then those payments may become non-discretionary. If that is the case, they should be included when calculating 80% of your employees wages.”
This hopefully clears up the big issue for supply teachers in England and Wales. Now, we hope all firms are furloughing at the right amounts.
Can bonus payments under furlough be backdated?
We’ve checked, and sadly past furlough pay can’t currently be backdated (though HMRC tells us it’s working on changing this). But as firms are currently applying for the money for May’s payrolls, they are allowed to adjust the amount for that. And of course with the furlough scheme being extended to October, this is very important going forward.
How should supply teachers use this information?
The agencies’ nervousness will have come from the fact that while they can claim for the higher amount to be paid to furlough staff, it is later subject to an audit if it was done incorrectly, so they will want comfort that they’re doing the right thing based on their salaries. The new guidance should hopefully give them the confidence to go ahead and furlough the higher amount. So it’s worth asking them again in light of this (and having the guidance to hand).
But ultimately furloughing isn’t compulsory, it’s up to the firm. Yet even if we ignore the fact it’s the right thing to do, rather than leaving employees with no income – there is an argument that treating supply teachers (ie, their product) well is, over the long run, good for business once we start to move back to normal. That’s an argument teachers may want to politely use.
Note. The above applies to supply teachers in England and Wales.
In Scotland, supply teachers on temporary fixed-term assignments/contracts will suffer no detriment in regards to pay, whereas those on short-term assignments between 1 January 2020 to 31 March 2020 will have their pay based on an average over the three-month period.
In Northern Ireland, supply teachers are directly employed by the Department for Education, which has agreed to keep paying its substitute teachers separately to the CJRS.