Guidance

056/20 Update to Action Note 052/2020: Hourly rate salary costs for project staff who are self-isolating / ill due to COVID 19 and unable to work and who are working on ESF projects that started after Q4 2019 claim period.

Updated 5 December 2024

Date Issued	21 December 2020
Review Date	31 December 2022

1. Who should read

All ESF beneficiary organisations, European Social Fund Division & Greater London Authority.

2. Purpose

Provides an update to ESF Action Note 052/2020 regarding how the `hours worked’ calculation for self-isolating or sick staff can be applied to projects that were not operating in time to use Q4 2019 claim as a reference point for calculating average ‘hours worked’.

3. Background

At the beginning of the pandemic in March 2020, the ESF Managing Authority received queries from projects who were 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 introduced 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 ESF Action Note 052/2020.

Action Note 052/2020 was updated on 28 July 2020 to clarify the temporary claims easement applies to Quarter 2 2020 claims onwards and only applies to absences from 1 April 2020. It also explained that it applies 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. The Action Note explained that the `average number of hours worked’ calculation explained in the calculation methodology should be based on average hours worked during Q4 2019 claim period.

This Action Note (056/20)note explains that, for projects that started after Q4 2019, the following approaches can be made:

• use an average of the hours worked in the previous claim period (to the one currently being claimed) if the project was not operating in Q4 2019. For example, if the project started after Q4 2019 and the staff member is self-isolating in Q4 2020 – use average hours worked in Q3 2020 to calculate average hours worked for Q4 2020

• if the staff member is a recent recruit and doesn’t have a ‘previous quarter’ claim period to reference for calculating average hours worked, the project should calculate an average weekly hours figure by using the HR letter issued to the individual and to be prepared to show those calculations to an auditor should they be selected for future audit.

The approaches above are optional but where they are 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.

4. Action

Calculating the average number of hours worked.

Projects that are unable to use the Q4 2019 reference period because they started after that quarter, will need to calculate the average number of hours worked in the previous quarter claim period. The calculated `average hours’ should then 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 previous quarter claim’ - for example Q3 2020.

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 Q4 2020 claim – refer back to Q3 2020 to calculate average monthly hours:

July 2020 hours claimed: 25 August 2020 hours claimed: 25 September 2020 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

If the staff member is a recent recruit and doesn’t have a `previous quarter’ claim period to reference for calculation purposes, the project should calculate an average monthly figure by using the HR letter issued to the individual and to be prepared to show those calculations to an auditor should they be selected for future audit.

5. Contact

If you have any questions about this Action Note or the guidance products, please contact ESF.2014-2020@DWP.GOV.UK