Furlough payments for agency workers

Amandayaxley

Can someone give me some advise, I work for an agency, and get paid through an umbrella company. My umbrella company deducts my Tax and Ni out of my wages each week. They are saying they dont know if they can furlough us due to Holiday pay, anyone else had this?
They sent an email Monday stating;
The issue that employers of temporary workers are facing: Holiday pay

On the 17th of April 2020, the government published information relating to holiday pay while on furlough leave - ultimately stating that furloughed employees continue to accrue leave as per their employment contract. Please note that the current information seems written with permanent employees in mind and does not always provide sufficient details as to how it will apply to temporary workers. The government has stated that there may be further clarification regarding holiday pay, which we will continue to monitor closely. MainPay believes that temporary employees should be able to take advantage of the relief available under this scheme and will absorb the costs of administration, and apprenticeship levy, but are awaiting further clarity from the government regarding Holiday Pay before making a decision on how best to proceed. 

Illusionary

The issue seems to be that they're unsure how to calculate furlough pay, rather than your eligibility for the scheme. I'm not sure what they see as ambiguous, though. You can see the guidance here: https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

Ultimately, it's up to the agency to decide whether or not to offer furlough, so you can't insist, but this feels like a harsh approach - they don't need to claim under the Government scheme immediately. Do you have any individual contacts at the agency who you can reach out to, to try to get a better understanding of the agency's plans and concerns, and the potential timetable for when they might offer furlough?

mo2lly

The issue is not in paying us during holiday weeks, as the agencies can pay us average over 52 weeks of last tax year,  which includes holiday weeks. They can claim 80% of this from the government. The issue seems to be the part included in our pay which is labelled holiday pay. The umbrella companies seem to believe that they will be required to pay that out of their own funds as it will not be included in the grant they can claim, and they have to pay it as a legal requirement. They cannot afford to take that hit. This encapsulates the thinking of many umbrella companies.

’ I have just had a long chat on the phone with my agent at the
agency I work for. He has explained the holiday issue that Umbrella companies are facing and I can now see where they are coming from to a certain degree.

Basically whilst on furlough we would still accrue holiday. Because of the way our holiday is payed within our wages then the umbrella company would need to continue paying us this holiday entitlement. For each of us this weekly amount may only seem small. Probably somewhere between £5 and £15 per week I'm guessing. In a small business this wouldnt be much of an issue but with companies that employ 15,000 people every week it soon adds up especially given that they, like us, dont have cash flow at the moment either.  Based on £10 per week for each employee this would be £150,000 each week of furlough.

They would go bust within a month.  

Umbrella companies just want government legislation to state one simple sentence......"Employees won't accrue holiday pay during Furlough".

This simple sentence will be the difference between us getting furloughed or not.’

Illusionary

mo2lly said:

The issue is not in paying us during holiday weeks, as the agencies can pay us average over 52 weeks of last tax year,  which includes holiday weeks. They can claim 80% of this from the government. The issue seems to be the part included in our pay which is labelled holiday pay. The umbrella companies seem to believe that they will be required to pay that out of their own funds as it will not be included in the grant they can claim, and they have to pay it as a legal requirement. They cannot afford to take that hit. This encapsulates the thinking of many umbrella companies.

’ I have just had a long chat on the phone with my agent at the
agency I work for. He has explained the holiday issue that Umbrella companies are facing and I can now see where they are coming from to a certain degree.

Basically whilst on furlough we would still accrue holiday. Because of the way our holiday is payed within our wages then the umbrella company would need to continue paying us this holiday entitlement. For each of us this weekly amount may only seem small. Probably somewhere between £5 and £15 per week I'm guessing. In a small business this wouldnt be much of an issue but with companies that employ 15,000 people every week it soon adds up especially given that they, like us, dont have cash flow at the moment either.  Based on £10 per week for each employee this would be £150,000 each week of furlough.

They would go bust within a month.  

Umbrella companies just want government legislation to state one simple sentence......"Employees won't accrue holiday pay during Furlough".

This simple sentence will be the difference between us getting furloughed or not.’

Okay. However, this isn't ambiguous - it's been made clear that all employees continue to accrue holiday entitlement during furlough and the likelihood of this changing will be near-zero.

Amandayaxley

So from reading the replies I can assume we won’t be getting any money any time soon. 

mo2lly

The question is why these payments can not be covered by the furlough grant, or the requirement to make such payments be suspended for the furlough period. At least then we would get something

Illusionary

mo2lly said:

The question is why these payments can not be covered by the furlough grant, or the requirement to make such payments be suspended for the furlough period. At least then we would get something

Unfortunately that's just not how the scheme works. For most employees this is likely to act as a protection of their employment rights, but I can see that this may not be the case for you. 

mo2lly

Then it is then it is necessary to adjust the scheme. That has already happened as needed and there is no reason why it can’t happen again. All that needs to be done is to tell companies that money claimed to cover the holiday pay element will not be raked back. After all most people’s holiday pay is included as part of their usual pay and therefore is included in the 80% that can be claimed for furlough. Ours could be treated in the same way. 

Illusionary

mo2lly said:

Then it is then it is necessary to adjust the scheme. That has already happened as needed and there is no reason why it can’t happen again. All that needs to be done is to tell companies that money claimed to cover the holiday pay element will not be raked back. After all most people’s holiday pay is included as part of their usual pay and therefore is included in the 80% that can be claimed for furlough. Ours could be treated in the same way. 

It doesn't work that way for permanent employees either. If employees take holiday during the furlough period it has to be paid at full rate, at the employer's expense. 

LilElvis

The scheme already covers 80% of holiday pay if it is taken during furlough - the employer is liable to top it up to 100%. The rules are the same for all employees. The government can't rip up the Working Time Directive to suit one, relatively small, group of employees.

Amandayaxley

LilElvis said:

The scheme already covers 80% of holiday pay if it is taken during furlough - the employer is liable to top it up to 100%. The rules are the same for all employees. The government can't rip up the Working Time Directive to suit one, relatively small, group of employees.

What do you mean? My umbrella company sent me the email that I wrote on this post? They are saying holiday pay is very unclear that is why they are not paying thurlogh payments yet.