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There are a few changes that employers need to be aware of from the last Treasury Directive that was issued. By way of a reminder, the following positions, which were outlined in the 5th Treasury Directive, remain unchanged:
The main change that employers need to be aware of is how to calculate the reference salary for employees who have a variable salary and how to calculate the usual working hours for an employee with variable hours.
The CJRS will have been running for a year by March 2021. This means that there is potential that an employee could have been furloughed in the corresponding month in 2020, therefore it would not be possible to use the corresponding month in the previous year as the reference point for their salary. Therefore, the Treasury Direction makes it clear that, to calculate furlough pay in March and April 2021 for employees who do not have a fixed rate, the corresponding month should refer to the employee's pay in March and April 2019 (not March and April 2020). However, when calculating that employee's furlough pay for January and February 2021, the corresponding calendar month in 2020 should be used.
For employees who have variable hours, for the 'calendar lookback' method, the following updates are applicable:
The above changes have been incorporated into the Government's guidance which can be found here. The guidance contains some practical examples of how the reference periods operate.