Generate Have Extended Furlough Through To September!

I am delighted to confirm that Generate has extended furlough for all our contractors until September. We take our responsibility towards our employees very seriously and our focus over the last few months has been to provide as much financial assistance to as many people as possible. We will therefore be providing continuing support via the Coronavirus Job Retention Scheme throughout the summer. 

From 1st August, employers are unable to recover any national insurance and pension contributions on furlough pay. Generate is committed to covering these costs at our own expense, in line with our responsibility as an employer. Ongoing support will not be dependent on agencies or clients contributing towards these costs, ensuring over 3,000 contractors will continue to receive much needed financial aid.

As part of our commitment to provide ethical and trustworthy contractor management solutions, we recognise our responsibility to support our employees through the Coronavirus pandemic. We acknowledge the difficulties contractors face and the uncertainly that lies ahead. We are pleased to be one of the few contractor management companies who have announced an extension to the scheme and hope to see our industry peers follow suit and do what is right. 

Fighting for Contractor Rights

Since the beginning of the pandemic and the introduction of the furlough scheme, myself and my team have been at the forefront of worker protection.

Generate was one of the first umbrella companies in the UK to secure maximum salary payments for contractors under the furlough scheme. By prioritising contractor care, we ensured our contractors were regularly updated on our position, as we fought on their behalf for fair furlough pay. Once successful, we ensured every eligible contractor received the support they needed, with no additional hoops to jump through. We furloughed everyone who had lost out of the opportunity to work, not just those who had confirmed assignments.

We paid the first set of backdated payments before receiving funds from HMRC, to ensure there were no further delays, and have continued to pay on that basis. With the extension of the furlough scheme, Generate’s contractors will continue to be supported through the next few months as life slowly begins to return to ‘normal’.

Future Changes Planned for the Furlough Scheme

To wind down the furlough scheme, the government have put forward a plan to phase out worker support. From 1st August, the government will pay 80% of wages up to a cap of ￡2,500 for the hours an employee is on furlough, but the employers will have to pay the corresponding National Insurance and pension contributions. From 1st September, the grant amount is reduced: the UK government will pay 70% of wages up to ￡2,187.50 for the hours the employee is on furlough, with employers paying National Insurance and pension contributions and topping up wages to ensure workers receive at least 80% of their wages up to ￡2,500.

From 1st October, the government will pay 60% of furloughed employee wages up to ￡1,875, with employers paying National Insurance and pension contributions and topping up wages to 80% of pay up to ￡2,500. Employers will continue to able to choose to top up employee wages above the 80% total and ￡2,500 cap for the hours not worked at their own expense if they wish and must pay their employees in full for the hours worked.

Furlough Payroll: How Industries Got It Wrong

Education

Between March and May 2020, almost 1 in 4 teachers had been furloughed or seen their contracts cancelled, with supply teachers bearing the brunt: 82% of supply teachers are currently on furlough or not in work. Whilst agencies across sectors were working hard to deliver accurate payroll services, unclear guidance, huge financial risks and varying methods of furlough pay calculation resulted in delayed furlough applications to HMRC and significant discrepancies in take-home pay for teachers, with companies drawing their interpretations from the Coronavirus Job Retention Scheme guidance. As well as this, umbrella companies who were operating non-compliantly were not able to take advantage of the scheme, leaving their contractors to bear the brunt of the consequences. 

Healthcare

More than 60,000 contractors have already been affected by the different interpretations of furlough pay, with the Healthcare sector disproportionately impacted. In addition to working in high-risk environments, care workers who become ill or are self-shielding due to health vulnerabilities have in many cases been forced to work under the threat of their wages being withheld. NHS England recently warned GP practices against furloughing any staff, despite the concerns of practices around claiming reimbursement of costs for long-term locums. 

Engineering & IT

Contractors working in the private sector have also experienced wage reductions and delays to payment. This meant hundreds of engineers and technicians were denied wages for over a month. At the end of last month, IT contractors were still being informed that they were not eligible for furlough pay – even in situations with no available work – because some umbrella providers were uninformed as to how the Job Retention Scheme worked. 

The impact on contractors has already been significant: 40% of teachers are financially worse off now than at the beginning of the year, with many expecting to miss out on up to 20% of their annual pay packets. 1 in 10 care workers knows a colleague who felt forced to continue working rather than self-isolating when necessary in fear of losing their job. Unison reports that some care staff have been told by their employers to use up annual leave or make up time for free when they return to work. Project delays have already reduced the earnings of construction workers, engineers and technicians, and construction companies are set to cut multiple jobs to remain solvent.

How Should Payroll Providers Have Helped Contractors and Agency Partners Throughout Furlough?

There are a variety of steps that your provider should have taken to help you through the furlough scheme:

• Communication – Keeping in touch with you at every stage to make you aware of changes and how they will affect you. Keeping their communication streams open and listening to your specific needs to ensure your situation was considered. 
• Announcements – Providing regular updates on how the company is responding to legal and market changes
•  Fighting for What's Right – Getting involved in Government policy, partnering with industry bodies and lobbying the Government to put your working rights at the centre of Covid-19 policy updates.

 If you have any questions or need any assistance, please do not hesitate to get in contact with myself or my team.

Adam Barton, CEO, Generate FS

Contact Generate FS

Phone: 0207 231 0349 | Email: [email protected] | Website: generate-fs.co.uk/