Urgent clarity sought on furlough pay for umbrella workers

Since the Coronavirus Job Retention Scheme (CJRS) was announced, Liquid Friday has been vocal about our plans to support it, as government allows. 

We fully intend to furlough our umbrella employees who have been laid off due to Covid-19 and are eligible for the scheme. This will mean we can maintain their employment and pay them a proportion of their current pay. 

We understand people are very anxious to know how soon this can happen, but there is still much uncertainty around the basic principles of paying umbrella workers under the CJRS on which we need urgent clarity.

UK’s leading professional bodies join forces

Five of the UK’s leading professional bodies –, FCSA, APSCo, Professional Passport, REC and TEAM – have joined forces to write to the government to seek urgent and absolute clarity on the calculation of pay for furloughed umbrella employees under the Coronavirus Job Retention Scheme (CJRS).

Without answers from the government on these key questions, over 1 million UK agency and umbrella employed workers’ livelihoods are at serious risk.

Despite repeated attempts by these professional bodies and their members lobbying the Treasury to get definitive answers, the government still has not provided full clarity on the following matters:

• Do agency workers (whether working through an agency or via an umbrella company) accrue holiday whilst on furlough leave?
  
• Is an umbrella employee’s furlough pay calculated on an average of all earnings or just basic pay (National Minimum Wage)?
  

Whilst the professional bodies said they welcomed the additional guidance recently published by government in relation to this scheme, the wording with regards to how umbrella employers are required to calculate payments for these employees still remains vague and open to misinterpretation. It is therefore vital that this matter is clarified once and for all so that the umbrella employees can be paid quickly, fairly and correctly.

Working together to support workers

Referring to the joint action, Julia Kermode, Chief Executive of the FCSA said: 

“The issues facing our respective members are very similar; they are keen to support workers but are unable to do so without clarity from the government, therefore, working together is the best approach to get the assurance our members need. We don’t believe that the government is deliberately putting barriers up but at the same time there are very significant risks to all of our respective members if they misinterpret the financial calculations of furloughing workers.  

“Given that our members all operate large scale payrolls, even a small error could be very significant for those businesses, equating easily to several million pounds.  That is why we have sought to work with the government to bring clarity, urgently and ultimately to enable workers to be supported at this difficult time.”

Liquid Friday’s Head of Operations, Joe Tafurrelli said:

“We are keen to start issuing payments under the Job Retention Scheme as soon as possible. Now that we have the UK’s leading professional bodies fighting in the same corner, I am optimistic we’ll get the answers we need from government. We appreciate our contractors’ patience during this uncertain time and we are working hard to keep everyone updated.”