We need answers and we need them NOW, says FCSA chief executive Julia Kermode

Job Retention Scheme

Government continues to stall on providing absolute clarity on CJRS furlough pay calculation at the expense of 625k umbrella employees and agency workers.

Since the Coronavirus Job Retention Scheme (CJRS) was announced by the government on 20 March 2020, the FCSA has come under scrutiny for the perceived failing of umbrella firms to access the coronavirus scheme for their workers.

The FCSA is being contacted daily, not just by its members, but recruiters, end hirers, and even more so, contractors. Understandably, they are all concerned and aggrieved about the impact this situation is having on either their business and/or them personally from a financial perspective.

The FCSA and its members want UK contractors to know that we are listening to their concerns and are as angry as they are by the governments’ failure to respond to our urgent request for clarity on furlough pay calculation for umbrella employees and agency workers under the CJRS.

For that reason, we wanted to provide some clarity of FCSA’s position on this matter and what we are doing as an organisation and with the wider sector to ensure contractors are paid fairly, correctly and swiftly under the CJRS.

The FCSA’s purpose is to safeguard the long-term future of the professional freelancer sector for the benefit of the UK economy. Whilst promoting compliance in order to protect contractors is our primary focus, it is also our duty as a professional body to lobby government to ensure not only that our members needs are represented to policymakers, but in doing so, we also protect those who they serve, the temporary workforce.

Therefore, and just to quickly recap, on 30 March, that is exactly what the FCSA did having identified several concerning loopholes in the CJRS guidance documents in respect of how contractors furlough and holiday pay is to be calculated. We took swift action to lobby the government in order to seek clarity on the ambiguities.

What we did

 

  • FCSA was the first professional body to identify the loopholes in the CJRS guidance documents to the detriment of umbrella employers, agencies and their employees.
  • FCSA was the first professional body to proactively seek clarity from government by lobbying at the highest level across all political parties and government departments and engaging the support of the temporary workforce sector to lobby their local MP.
  • In an unprecedented move, the FCSA joined forces with the sectors leading professional bodies and trade associations to bolster our lobbying efforts with a united voice.

In addition, there are widespread misunderstandings about the different arrangements for public sector workers versus those in the private sector.  The government has issued guidance[1] which states that public sector contingent workers, who would have been on assignments but are now unable to work due to coronavirus, should continue to be paid 80% of their wages up to £2,500 per month by the public sector in the usual way, however there is woefully inadequate awareness of this policy.

Only this weekend, in the press, did we see such misunderstandings come to light, following the misquoting of FCSA we might add, on how furlough pay will be calculated for public sector workers, notably our important NHS frontline workers and supply teachers[2].

The CJRS is a government-led initiative with no input whatsoever from the FCSA. How umbrella employees and agency workers’ furlough pay is calculated can only be determined by the government, not the FCSA nor its members. It is employers responsibility to calculate pay for furloughed employees in accordance with government guidance and the signed contract of employment.

Unfortunately, herein lies the problem; umbrella employers STILL DO NOT have clarity on how to calculate their employees pay under this new scheme. Again, this clarity can only come from government, not the FCSA. Our role, as explained above, has been solely to lobby government to ensure that our members have the right guidance upon which they can make their own informed commercial decisions so that contractors are paid fairly, correctly and swiftly. This is what the FCSA wants, this is what our members want, and this is what we continue to strive for.

 

Government is failing contractors with delayed response

Three weeks on, and despite the FCSA and other organisations persistent lobbying efforts, the government has failed to provide any communication whatsoever with regards to the calculation of pay for furloughed umbrella employees. Critically, the most important point that FCSA has been seeking an answer to is:

  • Does the government intend its support for contingent workers to be limited to minimum wage, or will it confirm that CJRS claims can be made based on the usual pay these workers receive?

What the government doesn’t seem to realise is that they are failing the contractor workforce by delaying its response – how are umbrella employers and agencies expected to calculate furlough pay for their employees without correct guidance? It’s worth noting that this is the position of both FCSA members and indeed companies who are not.

It is clear that the government has fundamentally failed to give thorough consideration to how the scheme will feasibly apply to this vital sector of our economy, many of whom are key workers. This can be the only explanation as to why they continue to delay in answering our questions.

 

Catastrophic consequences of failure to reply

 

If the government does not provide umbrella employers and agencies with absolute clarity on how they are required to calculate furlough pay for their employees, and to do so immediately, the consequences will be catastrophic.  It is unforgiveable that innocent contractors, who are so vital to our economy, are facing severe financial hardship whilst the government ignores our pleas.

Surely, this completely undermines why the Chancellor introduced the scheme in the first place. So why is it taking the government so long to reply to our queries at the expense of 625k contractors?

 

We need clarity and we need it NOW.

 

[1] See https://www.gov.uk/government/publications/procurement-policy-note-0220-supplier-relief-due-to-covid-19

[2] See https://www.fcsa.org.uk/who-is-going-to-pay-for-public-sector-contingent-workers/

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