Furlough and returning maternity employees

[TEKNOPUG]

I have a client who has an employee returned from maternity leave on the 1st November, that the client has furloughed.

The furlough entitlement is calculated on what the employee earnt in March, less SMP. Their accountants are saying that the client can only top up the employee salary to the March figure, not their actual salary.

Example figures:

Salary = £1k
March Salary less SMP = £500

80% HMRC furlough payment to client = £400
20% Client top up = £200

Employee salary = £500

I can't find any legislation to support this. The employee is facing a 50% pay cut whilst the client is receiving a 40% supplement from HMRC. The client wants to pay the employee their full salary but the accountants are insisting otherwise.

Any ideas?

[Countdown]

I think the Accountant’s calms are correct.

Why was she on half-pay in March?

[TEKNOPUG]

Countdown said:

I think the Accountant’s calms are correct.

Why was she on half-pay in March?

She was on maternity in March. So although still receiving full pay, an element of that was made from SMP. The furlough calcs are based on salary less SMP. So in the example, her basic pay was £500 and she received £500 in SMP, making up her £1000 salary.

I understand the furlough calcs are based on the £500 basic salary in March and thus the client can only claim 80% of this (£400). What we don't understand is why the client can not top up her salary this month to £1000? The accountants are saying they can only pay up to the £500 figure that the furlough is calced on.

[samwilliams]

I don't think there's anything to prevent you from paying whatever you like on top of the CJRS grant. Also, I'm not sure he's right about calculating the furlough rate taking into account SMP either. It's based on your "usual wage" which, I think, should disregard any maternity or other adjustments like that.

[TEKNOPUG]

samwilliams said:

I don't think there's anything to prevent you from paying whatever you like on top of the CJRS grant. Also, I'm not sure he's right about calculating the furlough rate taking into account SMP either. It's based on your "usual wage" which, I think, should disregard any maternity or other adjustments like that.

I think you may be right about the furlough rate also:

HMRC said:

Updated guidance on the furlough scheme that applies from 1st November states that your furlough pay should be calculated as follows if you have been on maternity or parental leave. Guidance states:
For employees on fixed pay, claims for full or part time employees furloughed on return from family-related statutory leave should be calculated against their salary, before tax, not the pay they received whilst on family-related statutory leave. The same principles apply where the employee is returning from a period of unpaid statutory family-related leave.