Thank you for asking about the Coronavirus Job Retention Scheme.
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.