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COVID-19: Umbrella employee guidance

Paul Malley

Paul Malley | Managing Director

Tuesday 2nd Jun, 2020

Furlough pay and umbrella workers

On 26th March 2020 the Government announced their Coronavirus Job Retention Scheme (CJRS) which has already been updated a number of times.

These updates have not yet specifically addressed what can be included in the furlough pay calculation for an umbrella employee. Nevertheless based on our discussions with HMRC and our advisors, we have taken the decision to include commission as well as basic pay in the furlough pay calculation.

This means that any eligible umbrella employee will be entitled to 80% of the greater of the average Basic Pay plus Commission in the tax year 2019-20; or, if they have been employed over a year, the Basic Pay plus Commission paid in the corresponding period in the previous calendar year, up to a maximum of £2500 per month.

Who is eligible?

To qualify you must satisfy all of the following criteria: 

  1. You must have been paid by PayStream on or before 19 March 2020.
  2. You are not currently claiming Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP) or Statutory Paternity Pay (SPP). If you’re claiming SSP because of coronavirus (COVID-19) you may be eligible to be furloughed after this provided you meet the other criteria.
  3. You must currently be employed by PayStream and if it were not for COVID-19 related issues would be available to work. This means that if you have found a permanent role elsewhere you are not eligible. If you have found temporary work elsewhere during the crisis this is ok.
  4. You are unable to work or find work because of the COVID-19 outbreak. This includes if you are self-isolating or shielding in accordance with Government guidelines or if you have caring responsibilities. It also includes where your assignment has been suspended, terminated or not renewed for COVID-19 related reasons (such as a site shutdown). If the reason that you cannot work is not related to COVID-19 then you will not be eligible.
  5. Your last working day must be on or before 9th June 2020.
  6. You have signed the PayStream furlough letter agreeing to be furloughed for at least 3 weeks. Once furloughed we cannot allow you to work for at least 3 weeks (from the furlough start date) if you want to qualify for furlough pay.
  7. You are not party to an arrangement whereby your agency or end client continues to make payments during the period while you're not working. This is common practice in the public sector.
  8. We have evidence relating to 4 above from your agency or client which confirms that assignments are not currently available to you. Where we have an agency contact, we will try to obtain this information but may need assistance from you due to availability of agency staff due to COVID-19. Please note that some agencies have asked us not to furlough employees without checking with them as there may be assignments available.

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 next?

If you feel you fit the criteria above and would like more information regarding our furlough application process, then please email customer.care@paystream.co.uk.

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