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Umbrella Furlough

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    Umbrella Furlough

    Has anyone heard anything definite on whether their Brolly intends to participate in the furlough scheme as yet? I'm with Contractor Umbrella and although they previously informed me that they intend to partake, I've just received this, and TBH, I don't blame them ... or am I being too charitable as "five of the UK’s leading professional bodies – APSCo, FCSA, Professional Passport, REC and TEAM – have joined forces ..." to lobby the Treasury re Umbrella employee eligibility for the furlough.

    As everyone will now be aware, the Government has put into place special measures to help workers during the current coronavirus (Covid-19) situation. The Coronavirus Job Retention Scheme (CJRS) allows eligible PAYE workers to be “furloughed” so that employers don’t have to lay off staff in these uncertain times.
    For any other employer, using the scheme would be the most sensible option as it would allow them to keep staff and not incur salary costs, as the Government will be taking on this cost themselves (paying 80% of the normal salary, up to £2500 per month).
    However, for umbrella employers, the situation isn’t so simple. Workers are only eligible to be paid National Minimum Wage under the scheme, and any “discretionary bonus” or “commission payment” is excluded. And, although the Government has decided to cover Employers’ National Insurance contributions, which makes up one part of our employment costs, they have not included the Apprenticeship Levy which is also a significant sum and which would be a cost to us if not wholly covered under the scheme.
    Further, whilst furloughed, it seems likely that our workers will continue to accrue entitlement to paid leave. Without having a fund to pay that out of (because the worker has undertaken no work, and therefore no amounts have been generated), this will be another cost to umbrella employers.
    Alongside our duties as an employer, the small margin that we make to continue operating as a business is also not covered under the scheme. This means that we won’t be generating any income to cover our overheads, even though resources will still be used to manage the scheme.
    For the above reasons, we have decided to not furlough any of our workers until we can be sure that taking part in the scheme won’t cause substantial and ongoing losses.
    If the Government introduces any changes which makes us re-evaluate our position, we will be sure to let you know.
    Last edited by Wary; 14 April 2020, 16:43.

    #2
    I believe what your agent said above is the normal


    Sent from my iPhone using Contractor UK Forum

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      #3
      like i said previously they are paying lip service to private sector only the public sector will be ok, its a two tier society

      Comment


        #4
        Hmm.. that's disappointing.

        The HMRC guidance, found here, states:

        Agency Workers (including those employed by umbrella companies)

        Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies.

        Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.

        Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.
        Which is so vague as to be practically useless. However, there is information further down the link.

        I am confused by the part of your post referring to
        Workers are only eligible to be paid National Minimum Wage under the scheme, and any “discretionary bonus” or “commission payment” is excluded
        I guess your umbrella is operating a scheme that aims to balance out peaks and troughs in your earnings and so they pay you just NMW and then top up?

        Past Overtime, Fees, Commission, Bonuses and non-cash payments

        You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.
        Whilst they may have adjusted your payments to show a discretionary bonus, which is excluded, surely the payments are "regular payments you are obliged to pay your employees"?

        [RHETORICAL]What ever happened to simple umbrellas that paid over what you'd earned less taxes, instead of mess about with NMW and bonuses?[/RHETORICAL]

        It would be super helpful if one of our friendly umbrella companies could comment...

        Comment


          #5
          you should advise them that you chose to use their services and that you will now rethink that in the future

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