Workers who are being paid via an umbrella company are covered by the government’s job retention scheme (JRS) and can be furloughed during the coronavirus crisis.
An umbrella company is an intermediary which is responsible for paying a worker who is hired by another organisation, often an employment agency (see notes to editors for further information).
Umbrella companies covered
The government has confirmed that umbrella company workers are in scope of the JRS following lobbying from Unite, the UK and Ireland’s largest union.
Well in excess of 300,000 workers in the UK are paid via umbrella companies, including workers in a variety of sectors such as construction, teaching and logistics.
Not normal employees
Although umbrella company workers pay both employers’ and employee national insurance contributions and a normal rate of tax, they are often not considered to be standard employees and there were concerns that they did not fall under the scope of the JRS.
Following the intervention from Unite the latest information of the government’s scheme clearly states that umbrella company workers are fully part of the scheme.
Do the right thing
However, given the fact that umbrella companies are simply intermediaries that pay the worker, pressure may need to be applied for them to honour their responsibilities and ensure that workers receive the furlough pay to which they are entitled.
Unite assistant general secretary Howard Beckett said: “It was vitally important that the government confirmed that umbrella company workers were part of the furlough scheme.
“It is now absolutely imperative that umbrella companies do the right thing and furlough their affected workers.
“If any Unite member working via an umbrella company is not furloughed, Unite will be using all its influence industrially, legally and politically to ensure that workers are not mistreated and receive the money they are entitled to receive.
“Umbrella companies that don’t do the right thing and try to cut workers adrift without pay, alongside the employment agencies which require workers to be paid in this way and the clients who allow workers to be hired in this way, will be named and shamed.”