Two-thirds | Staff continue working in HUGE numbers despite furlough

Staff continue working in HUGE numbers despite furlough

As a lifeline to businesses and employees during the coronavirus crisis, Chancellor Rishi Sunak previously unveiled the Coronavirus Job Retention Scheme (CJRS) to prevent wide-scale unemployment and to keep people in jobs.

More commonly known as furlough, employees placed on the scheme can receive 80% of their monthly wages up to £2,500 per month and are required to follow specific rules laid out by the UK Government.

Yet, new research has found that two-thirds of UK workers placed on the furlough scheme have continued to do their job during the COVID-19 lockdown period when they are not allowed to.

According to the Guardian, the research suggested that men were more likely than women to break the rules and carry out work for their employer.

The data unearthed that three-quarters (75%) of furloughed men had their wages topped up beyond the 80% paid by the UK Government, while just 65% of women enjoyed the same.

Acas explained that employers can decide whether they will top up furloughed workers’ wages though this is not compulsory.

However, if the employer decides not to, this reason should be communicated with the staff member.

In addition, the study found that 87% of men and 77% of women who had their salaries topped up continued to work for their employer, even though this goes against the rules.

For those that didn’t see their pay topped up, 69% of men and 52% of women continued to ignore these rules.

Dr Christopher Rauh, an Economist at Cambridge University, told the Guardian that one reason for this ‘seems to be down to a deal with the employer’, such as an employee’s salary getting topped up and them then carrying out work.

“But it also seems that people are afraid of losing their jobs when the scheme ends. In particular, men who can do work from home, are doing it,” Rauh added.

Elsewhere, the research from economists at the universities of Cambridge, Oxford and Zurich found that women were more likely to be furloughed than men doing the same type of role.

Furlough fraud cases ‘tip of the iceberg’

Last month, ITV News revealed that almost 4,500 whistle-blower complaints to HMRC were made as businesses forced furloughed staff to work.

In addition to this, the whistle-blowing charity Protect revealed that 36% of its COVID-related calls involved furlough fraud.

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Steven Mather, a Consultant Solicitor at the national law firm Nexa Law warned that business owners run the risk of being prosecuted by HRMC, and having to pay tax and penalties, because of furlough fraud and that the number of cases reported to HMRC are ‘just the tip of the iceberg’.

The commercial lawyer conducted a report into COVID-19 support fraud and believes that HMRC will be ‘hot on the heels’ of businesses who flout the rules laid out in current and new legislation – which is intended to prevent the support schemes from being abused.

What is furlough fraud?

Mather highlighted a number of issues he had recently seen which may amount to furlough fraud:

  • Furloughing staff and not paying them the full 80% under the scheme. For example, only agreeing to pay 60-70% of usual pay and pocketing the extra.

  • Employers making backdated claims that include periods in which the employee was not working.

  • Pretending to hire staff (ghosting) in order to take advantage of the support payments.

  • Asking the employees to work, either as a “volunteer” or “paid on the side” or as a “self-employed contractor”.

  • Furloughing employees (without their knowledge) and they continue to work as normal.

  • Using the payments to fund notice pay when terminating an employee’s employment.

  • Using the payments to pay for redundancy pay.

The commercial lawyer added: “I’ve also seen employees being told they will be furloughed but only paid 60% or 70% of their usual salary, with the employer pocketing the difference”.

“Another unlawful tactic is to furlough an employee and then ask the employee to do some work either as a volunteer or in some cases via a different company or on a self-employed basic.

“Whichever way you look at it, it is fraud – it’s a complete misuse of public funds to benefit the greedy business owners,” he added.

First arrests made last month

Last month, HMRC confirmed that the first arrests in connection with alleged furlough fraud had been made.

Details obtained by The Revenue explained that an unnamed man from the West Midlands was arrested in connection with alleged fraud of the scheme.

Richard Las, Acting Director of the Fraud Investigation Service at HMRC, previously told The Express: “The Coronavirus Job Retention Scheme is part of the collective national effort to protect jobs. The vast majority of employers will have used it responsibly, but we will not hesitate to act on reports of abuse of the scheme.

“This is taxpayers’ money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding,” Las concluded.

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Comments (1)

  • Kevin Lawrence
    Kevin Lawrence
    Mon, 10 Aug 2020 1:04pm BST
    This level of corruption in business is staggering and the skewed ethics that lead to it will have predated any Covid knee-jerk on their part. And, if 2/3rds of workers have abused it, I question the claim that the vast majority of employers will have been using it 'responsibly'!

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