Guidance

052/2020 Hourly rate salary costs for project staff who are self-isolating/ill due to COVID-19 and unable to work

Updated 5 December 2024

See also ESF Action Note 056/20

Date Issued	28 July 2020
Review Date	31 December 2020

1. Who should read

This Action Note is to all European Social Fund (ESF) beneficiary organisations (Grant Recipients and Co-financing Organisations), the Greater London Authority and other Intermediate Bodies.

2. Purpose

This updated Action Note provides clarification to projects of the claims process to use where ESF project staff have an hourly rate set using either the ESF Direct Staff Cost Methodology 2 or ESF Direct Staff Cost Methodology 3 (see Action Note 038/19 for further details) and who are unable to work as a consequence of self-isolating or illness due to COVID-19.

3. Background

The ESF Managing Authority has received queries from projects who are unsure how to claim direct staff costs for project staff who do not work wholly on an ESF project, work a variable number of hours monthly and record hours worked on a timesheet, who are self-isolating or ill due to COVID-19 and unable to work. In response, the Managing Authority is introducing a temporary easement for projects to claim direct staff costs for project staff in these circumstances.

This is one of a number of easements we have introduced to help ensure that ESF projects are not disadvantaged by the impact of COVID-19.

On 7 July 2020 the Managing Authority published the first version of this ESF Action Note. This updated version clarifies that this temporary claims easement applies:

• to Quarter 2 2020 claims onwards and only applies to absences from 1 April 2020.
• equally to ESF project staff who have an hourly rate set using either the ESF Direct Staff Cost Methodology 2 or ESF Direct Staff Cost Methodology 3

This Action Note supersedes the version published on GOV.UK between 7-27 July 2020.

4. Action

The temporary claims COVID-19 easement to calculate average staff costs applies from Quarter 2 2020 claims until further notice and only applies to absences from 1 April 2020. Projects should therefore use this easement to calculate average staff costs with effect from 1 April 2020.

For staff who do not work wholly on an ESF project, where an hourly rate calculation is established based on the hours worked and the submission of timesheet evidence would be the usual process, but no hours have been worked / recorded due to COVID-19 related self-isolation or illness, it has been agreed projects can use an average of the hours worked over the Q4 2019 period multiplied by the hourly rate to establish the amount of direct staff costs to be claimed.

This approach is optional but where it is adopted:

• There is no requirement for the project to:
  • obtain agreement from their Managing Authority Contract Manager or provide details of which staff have been impacted.
  • provide the evidence to support the costs unless the relevant line is selected as a Desk Based Evidence Check (DBEC). Where it is selected for DBEC, the Contract Manager will only check the actual calculation and not, for example, timesheets.
• Projects must provide a brief summary within their Progress Report to explain any impact on performance.
• Projects must retain the full evidence they hold for any future requests, including Article 125 and Article 127 visits.

Please Note:

• For projects where reduced hours have been worked due to COVID-19, the hourly rate set using either the ESF Direct Staff Cost Methodology 2 or ESF Direct Staff Cost Methodology 3 (see Action Note 038/19 for further details) must be followed. However, the bullet points above will also apply.

• Where an organisation receives Statutory Sick Pay (SSP) for project staff in these circumstances, this should be off set against the amount claimed from ESF.
• The process described above must not be used where the ‘fixed percentage’ rule is being used to calculate direct staff costs.
• If a current role that potentially could be claimed for from Quarter 2 2020 was not included in the Quarter 4 2019 claim then the calculation set out in this Action note cannot be used. This is because the Managing Authority is unable to ‘verify’ the number of hours worked, and therefore the number of ‘average’ hours to be included in the claim.

Calculating the average number of hours worked

For project staff where the circumstances above apply the project will need to identify the number of hours worked using the information in their Quarter 4 2019 claim.

Using this information, an average number of hours worked over the 3 months covered by the Quarter 4 2019 claim should be calculated. Once the average number of hours is established this should be multiplied by the hourly rate calculation set for the individual member of staff to arrive at the amount of direct staff costs that can be claimed.

Projects should provide details of where this calculation is used, in their progress report.

Calculating Average Hours

• Identify and record hours worked for each month covered by the Quarter 4 2019 claim.

• Add the hours worked each month together and divide the total by 3, to establish the average number of hours worked.

• Use the hourly rate established for the member of project staff and multiply by the average number of hours worked, to establish the amount to be claimed.

• Record and save the evidence to support the calculation for audit purposes.

• Include the amount in claims from Quarter 2 2020 and provide an update of action taken in the progress report.

Example

October 2019 hours claimed:	25
November 2019 hours claimed:	25
December 2019 hours claimed:	10
Total hours worked:	60

Divide 60 (hours) by 3 (number of months) to establish a monthly average: 20 hours

Hourly rate for individual staff member (example) £12.20

Multiply the hourly rate of £12.20 by 20 hours to establish the monthly figure to be claimed: £244

5. Contact

If you have any questions about this Action Note please contact: esf.2014-2020@dwp.gov.uk