The coronavirus job retention scheme was introduced in March to keep workers earning during the coronavirus pandemic. Under the terms of the scheme a worker can be placed on ‘furlough’, meaning they remain on their employer’s payroll, but they will not be able to complete any work for the employer in the meantime. The Government will then pay 80 percent of an employee’s salary, capped at £2,500 a month.
Are agency workers eligible for furlough?
Under the recently revised terms of the coronavirus job retention scheme, agency workers can be furloughed.
Kate Palmer, Associate Director of Advisory at Peninsula, said: “Many employers may wonder if the Government’s job retention scheme, in which staff can be placed on furlough and 80 percent of their wages paid through the scheme, extends to agency workers.
“The short answer is that yes it does. Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where umbrella companies employ them.
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“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 on whether to furlough the worker or not.”
Although it is possible for agency workers to be furloughed, there are some reasons why an agency might choose not to explore this option for its staff.
Why are some agencies not furloughing workers?
There have been some reports of agency workers refusing to furlough workers under the coronavirus job retention scheme.
Gillian McAteerm, Head of Employment Law at Citation, told Express.co.uk there are many regions why some agencies may not use the coronavirus job retention scheme.
She said: “Many are reported to have adopted the stance that they will only furlough agency workers where there is a commitment in writing from their client to continue to use the agency worker after the crisis has ended – a commitment not many businesses will be keen to give at the present time when we are all in uncharted waters.”
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Ms McAteerm said another reason agencies may not furlough workers is “the complexity of valuing the claim”.
Unlike employees on fixed salaries, agency workers’ pay “is likely to be variable” and “some agencies may be put off by the complexity of calculating and submitting the claim”.
Sybille Steiner, partner at Irwin Mitchell, added: “[Agencies] may be worried about other additional costs, such as holiday which continues to accrue during furlough.
“Even if agencies ask their staff to take holiday during furlough, they have to top up their pay as holiday has to be paid at the worker’s ‘normal rates’ averaged over the previous 52 weeks if their pay varies.”
Joshua Burke, an employment lawyer at Forbes Solicitors, explained some agencies might not be furloughing staff to protect their businesses, by keeping staff available for future opportunities.
He said: “As soon as they’ve furloughed employees, by virtue of the coronavirus job retention scheme, those workers are then not available for temporary contracts, meaning there’s no chance for agencies to earn commissions and placement fees.
“Agencies realise the current coronavirus situation is fast-changing and may create short-term employment opportunities for workers.
“By keeping staff available for work, agencies are creating some form of opportunity to keep their businesses running and to help meet staffing demand.
“Agencies are within their rights to do this and it helps to put less pressure on the public purse.”
What support is available for agency workers who cannot be furloughed?
An agency worker who is not furloughed by their employer may be able to access Government support if their income has been affected by the pandemic.
In March Chancellor Rishi Sunak announced a major boost to the Government’s budget for benefits such as Universal Credit, which can help people with their living costs.
If you need advice on what support you may be able to access during this difficult financial time, you can contact the Citizens Advice charity.
You can call their Adviceline on 03444 111 444, or you can chat with an adviser online on their website.
Anyone seeking to make a new claim for Universal Credit should call the Universal Credit Help to Claim line on 0800 1448444.
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