Furlough pay and umbrella workers
On 26th March 2020 the Government announced their Coronavirus Job Retention Scheme (CJRS). It took some time for the sector to get clarity on the definition of how a regular salary could be determined for an umbrella worker, but after many discussions with HMRC and our advisors we were able to get the clarity we needed to get comfortable with our interpretation.
As such we supported thousands of contractors with our furlough scheme. And unlike other providers, we made sure that our eligibility criteria included as many affected umbrella workers as possible, even though we knew the costs in doing so would be substantial.
Since then we have seen changes to the CJRS which saw more of the costs moving from Government to the employer in a staged manner from August through to October. As the country enters into its second lockdown Government have announced that the CJRS will remain open until December, with employers retaining the costs of Employers NICs and Pension contributions.
Many of these costs are normally absorbed within the supply chain and included in the contract rate, so would be incremental costs for us. Given that we made the decision early on to support as many contractors as possible, the numbers associated with these additional costs could be in the millions. This is why regrettably we are unable to continue to support the extended furlough scheme.
If you work in the public sector
The Government expects that the JRS will not be used in respect of those working in the public sector as the majority of public sector workers are continuing to provide essential public services or contribute to the response to the coronavirus outbreak. Many public sector organisations have a scheme to pay 80% of pay to those workers who are not working, including those through umbrella companies. You should check with your agency if this is applicable in your case before applying for the Scheme.
This also applies to non-public sector organisations who receive public funding for staff costs. Organisations who are receiving public funding specifically to provide services necessary to respond to the coronavirus are not expected to furlough staff.
In a small number of cases, for example, where organisations are not primarily funded by the Government and whose staff cannot be redeployed to assist with the coronavirus response, the Scheme may still be appropriate.
What other financial support is available?
If you have any questions regarding any of this please contact our customer care team on firstname.lastname@example.org.