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COVID-19 Support Hub

Coronavirus Job Retention Scheme Information for Contractors

Coronavirus Job Retention Scheme Information for Contractors

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As you may be aware Government have been working arduously to try and assist businesses and all associated workers via the Coronavirus Job Retention Scheme.

Last week announcements were made as to how the Job Retention Scheme would apply and measures as to how the self-employed will be able to access support through these very challenging times.

Across Morson Group we engage temporary workers across a variety of contractual models and we have summarised our current understanding of the scheme and how it may affect our workforce, in addition we are seeking external legal advice to ensure we can support workers who may be eligible subject to our clients future requirement for such temporary workers. This is of course subject to confirmation from government and any changes they might make. However please note it is our understanding that if clients are not in a position to retain the positions in question and re-engage at some point then it may be necessary to issue contractual notice.

Temp PAYE workers engaged on a contract for service

If the end client wishes to retain the temporary workers but needs to stand them down in the short term with a view to re-engaging them once we are through these turbulent times, then the worker can be deemed to be “furloughed”. As such if qualifying for the new scheme they will be entitled to a monthly payment equivalent to 80% of their average monthly earnings up to a maximum of £2,500 gross, please note to qualify a furloughed period needs to be a minimum of 3 weeks. As an example, if the worker currently earns an average of £2,000 per month currently then their entitlement would be £1600 gross per month. The government have pledged to meet these payments up to the end of May, though this may be reviewed subject to further developments in relation to the Coronavirus epidemic.

Importantly, if furloughed the worker cannot undertake any further work during such period.  Unfortunately, if workers are actually issued notice they cannot be Furloughed and will need to seek support via other government benefits schemes.

Umbrella workers engaged on a contract of employment 

Under similar lines to the above, where circumstances and conditions permit the Umbrella company as employer will meet such payments to eligible workers via accessing the Government Job Retention Scheme.

PSCs (Limited Company) workers

The Government have announced a scheme specific to the self-employed and below is an extract in relation to a PSC worker. PSCs will need to access such scheme directly and not via the agency.

“Those who pay themselves a salary and dividends through their own company are not covered by the scheme but may be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.”

Please be assured that Morson are working tirelessly to help where we can, protect the temporary workforce and in conjunction with our clients, seeking to protect as many jobs as possible. However, details and arrangements to access the schemes are still being constructed by the relevant government departments.

Where these arrangements might apply, we will be in further contact with you as soon as we are clear as to the intentions of particular clients with whom you are currently on assignment. With regards to those contractors who are engaged through an Umbrella, we will notify the Umbrella company of the situation and you should contact them for further information.

We hope this gives some additional useful information to you and imparts our current understanding of how this government initiative might help through a very difficult period.