Can employee agree to cover furlough costs from August?

vamospipo

I was wondering if it will be possible for the employee to agree with the company to cover the part they will have to pay from August. 

As we know, from August companies will have to contribute, but many employees were kept in the payroll just because it was free for them. However, now that August is getting closer, many companies are laying off the employees they consider won't need in the future. At this point, is it possible/legal to agree that the employee will cover any contribution to the scheme and that money to be deducted from their payslip?

For many people will be a better option to cover these costs themselves and still be able to get the balance until October than losing any income from August. 

[Deleted User]

As far as my understanding no, this would not be legal. As part of the scheme no charges, fees or deductions may be levied and that would be regarded as a deduction, levy or fee depending on how it was structured. 

The scheme was designed to retain jobs until a business could be self-sustaining again, it was not designed as a higher rate unemployment benefit, although admittedly it does function in that way for some people. 

neilmcl

So ultimately what you're asking is if it'll be OK for employees to pay their employer for the right to work?

vamospipo

neilmcl said:

So ultimately what you're asking is if it'll be OK for employees to pay their employer for the right to work?

No, I'm assuming that the employee will lose their job sooner or later because the company is trying to reduce costs, so the employee won't be back at work for sure.

Having said that, and based on previous decisions like being able to rehire people at the beginning of the scheme because it was free for the companies, it would be worthy for employees to pay for being kept at the payroll than losing the job already in August.

neilmcl

vamospipo said:

neilmcl said:

So ultimately what you're asking is if it'll be OK for employees to pay their employer for the right to work?

No, I'm assuming that the employee will lose their job sooner or later because the company is trying to reduce costs, so the employee won't be back at work for sure.

Having said that, and based on previous decisions like being able to rehire people at the beginning of the scheme because it was free for the companies, it would be worthy for employees to pay for being kept at the payroll than losing the job already in August.

It was called the job retention scheme for a reason, ie, to retain positions so they can be filled at a later date when things are getting back to normal. It's not there to keep employees in income where there's no future of work available for them. As mentioned it's not there as some form of benefit for the future unemployed.

vamospipo

neilmcl said:

vamospipo said:

neilmcl said:

So ultimately what you're asking is if it'll be OK for employees to pay their employer for the right to work?

No, I'm assuming that the employee will lose their job sooner or later because the company is trying to reduce costs, so the employee won't be back at work for sure.

Having said that, and based on previous decisions like being able to rehire people at the beginning of the scheme because it was free for the companies, it would be worthy for employees to pay for being kept at the payroll than losing the job already in August.

It was called the job retention scheme for a reason, ie, to retain positions so they can be filled at a later date when things are getting back to normal. It's not there to keep employees in income where there's no future of work available for them. As mentioned it's not there as some form of benefit for the future unemployed.

I know it's supposed purpose as the name of the scheme says it clearly. 

However, it has been used as a kind of benefit from the beginning as companies were able to rehire people who were already being laid off in March or people who changed companies right before the crisis. 

My point is, it is very different how it is supposed the scheme to be used and how it has been used, that's why I ask if it would be legal to try to extend it.

poppy12345

vamospipo said:

neilmcl said:

So ultimately what you're asking is if it'll be OK for employees to pay their employer for the right to work?

Having said that, and based on previous decisions like being able to rehire people at the beginning of the scheme because it was free for the companies,

It's not free, it costs the employer to furlough employees.

gt94sss2

vamospipo said:

I was wondering if it will be possible for the employee to agree with the company to cover the part they will have to pay from August. 

As we know, from August companies will have to contribute, but many employees were kept in the payroll just because it was free for them. However, now that August is getting closer, many companies are laying off the employees they consider won't need in the future. At this point, is it possible/legal to agree that the employee will cover any contribution to the scheme and that money to be deducted from their payslip?

For many people will be a better option to cover these costs themselves and still be able to get the balance until October than losing any income from August. 

I suspect HMRC would view an employer trying this as defrauding the scheme

Jeremy535897

If the employer pays the employee less than the amount on which the CJRS is based (80% of the employee's reference salary, the costs of employment for that employee don't meet the qualifying condition in paragraph 7 of the Treasury Direction:
"7.1 Costs of employment meet the conditions in this paragraph if-
(a) they relate to the payment of earnings to an employee during a period in which the employee is furloughed, and
(b) the employee is being paid-
 (i) £2500 or more per month (or, if the employee is paid daily or on some other periodic basis, the appropriate pro-rata), or
 (ii) where the employee is being paid less than the amounts set out in paragraph 7.1(b)(i), the employee is being paid an amount equal to at least 80% of the employee’s reference salary."

The result is that no claim under the CJRS can be made.

vamospipo

Jeremy535897 said:

If the employer pays the employee less than the amount on which the CJRS is based (80% of the employee's reference salary, the costs of employment for that employee don't meet the qualifying condition in paragraph 7 of the Treasury Direction:
"7.1 Costs of employment meet the conditions in this paragraph if-
(a) they relate to the payment of earnings to an employee during a period in which the employee is furloughed, and
(b) the employee is being paid-
 (i) £2500 or more per month (or, if the employee is paid daily or on some other periodic basis, the appropriate pro-rata), or
 (ii) where the employee is being paid less than the amounts set out in paragraph 7.1(b)(i), the employee is being paid an amount equal to at least 80% of the employee’s reference salary."

The result is that no claim under the CJRS can be made.

I see, thanks for the info!

unholyangel

vamospipo said:

neilmcl said:

vamospipo said:

neilmcl said:

So ultimately what you're asking is if it'll be OK for employees to pay their employer for the right to work?

No, I'm assuming that the employee will lose their job sooner or later because the company is trying to reduce costs, so the employee won't be back at work for sure.

Having said that, and based on previous decisions like being able to rehire people at the beginning of the scheme because it was free for the companies, it would be worthy for employees to pay for being kept at the payroll than losing the job already in August.

It was called the job retention scheme for a reason, ie, to retain positions so they can be filled at a later date when things are getting back to normal. It's not there to keep employees in income where there's no future of work available for them. As mentioned it's not there as some form of benefit for the future unemployed.

I know it's supposed purpose as the name of the scheme says it clearly. 

However, it has been used as a kind of benefit from the beginning as companies were able to rehire people who were already being laid off in March or people who changed companies right before the crisis. 

My point is, it is very different how it is supposed the scheme to be used and how it has been used, that's why I ask if it would be legal to try to extend it.

The scheme was never allowed to be used the way some people are using it though - and hmrc do (now) have the power to recover monies that were claimed incorrectly or fraudulently. Something the employer agreed to (plus penalties, if appropriate) when they made the claim. 

Some employers are about to get a shock, if posts on here have been anything to go by. 

The employer has to pay the employee all the money due. There are no ifs, buts or maybes to that. Nor is furlough free to employers - employees continue to accrue normal employment entitlements like length of service, holiday pay, maternity etc. 

It's quite clear the scheme is not intended for the circumstances you describe given administators were specifically mentioned as only expected to furlough staff/access the scheme if there is a reasonable probability of rehiring the workers (aka shouldn't be using the scheme to postpone the inevitable).