top of page
  • Rob Wilks

Coronavirus Job Retention Scheme – our current stance and what it means for our umbrella employees.

When Rishi Sunak announced the Coronavirus Job Retention Scheme (CJRS) on the 20th March, there was a sigh of relief from the nation – workers would be supported through this difficult period. Indeed, this scheme was unprecedented by any UK government but like much of the response to the current pandemic, it was introduced very quickly. The actual government guidance on how this scheme would operate was only released almost a week later on the 26th March and we still find ourselves with a number of questions.

The CJRS is aimed at paying 80% of wages to a furloughed worker (up to £2500 per month). A furloughed worker is one that is placed on temporary leave of absence, instead of being made redundant straight away. It should allow businesses to significantly reduce their overheads with a view of restarting quickly in a few week’s time without having to re-hire; this would also secure many people’s positions in these uncertain times.

Whilst this scheme is aimed at all PAYE employees, it does seem to be more geared up for those in permanent rather than temporary employment. We have spent the last week speaking to legal advisers, our trade body, the FCSA and attending a number of online webinars to attempt to establish how the CJRS would work for our umbrella employees. Unfortunately, at this point, there are still several issues that must be addressed by government before implementation could be considered – it is the employer that ultimately makes the decision on which workers can be furloughed.

The issues with implementation of the CJRS for umbrella employees

· The CJRS guidance does not currently confirm how variable pay will be dealt with in enough detail. Umbrella workers currently receive an element of pay at NMW/NLW and the rest as ‘additional pay’. We currently do not know whether we will be limited to 80% of the average NMW/NLW each week or whether it will be 80% of the complete taxable pay. We have requested urgent clarification from the Treasury on this matter as we wish to pay umbrella employees as much as possible.

· There is still some clarification on what evidence we would need to supply as an employer to demonstrate that the worker being furloughed due to Covid-19. The CJRS is only applicable to Covid-19 related furloughing and whilst most current job losses will be as a direct result of the current pandemic, we need to be sure we can recover any money we are paying out to umbrella employees.

· Furloughing has to be for a minimum of 3 weeks according to the CJRS guidance. We are still seeking government clarification on what would happen if a worker found an assignment within these three weeks. It is our assumption they would not be able to take this currently.

· There are still questions over who can qualify for the CJRS. Only those on payroll on or before the 28th February are eligible. We would assume that this would mean an actual RTI being submitted or in plain English, actually having been paid by this date. It may be that someone who started at the end of February but not paid until March would be excluded.

What are we currently doing?

We are currently engaging with our tax and employment advisors to answer the many clarifications that we still require. Additionally, the FCSA (Freelance & Contractor Services Association) of which we are an accredited member are lobbying the government on behalf of their umbrella company members for further urgent clarification where the CJRS guidance is currently silent.

We hope to receive clarification in the coming days. It is absolutely our intention to furlough as many eligible workers as possible and support temporary workers and their families at this time. However, the Treasury must provide further clarification on the many issues we have before we look at furloughing workers and accessing the CJRS.

What can you do?

Our trade body have released a statement which you can read here. One of their suggestions is to lobby your MP for urgent clarification on the issues outlined so the CJRS is accessible for eligible umbrella employees. It is suggested you use the letter template written by the FCSA which you can download here. We have sent this to our local MPs to encourage urgent action.

For those working within the public sector, there may be an immediate recourse to funds. It was recently announced in a Cabinet Office communication, that any temporary worker engaging on an assignment for Central Government Departments, their Executive Agencies and Non Departmental Bodies should still be paid, even though they may not be able to work due to Covid-19. We would recommend speaking to your recruitment agency who will be able to confirm whether your assignment qualifies in this case. If it does, you will continue to be paid in full in the normal way.

530 views0 comments


bottom of page