Public sector contractors eligible for furlough scheme
- 7th April 2020
Contractors working for public sector organisations through personal service companies (PSCs) will now be eligible for the government’s Coronavirus Job Retention Scheme if they are unable to continue working due to the COVID-19 pandemic.
This applies to workers whose contracts are ongoing at the time when it is decided that they cannot continue working. This could include locum doctors working in the NHS, and IT contractors working on strategic projects, for example.
However, there is no sign that these rules will be extended and applied to private sector off-payroll workers.
The government has stated that the scheme will apply to all categories of contracted workers, including PAYE, umbrella companies, and PSCs.
Like all employees eligible for furlough, contractors who are put on the scheme will receive 80% of their normal salary up to £2,500 per month, with businesses able to supplement some or all of the remaining amount if they so choose.
The £2,500 cap relates to gross pay, excluding statutory contributions such as National Insurance. If any worker earns over £3,125 a month (80% of which is £2,500), they will only get paid a maximum of £2,500.
These measures have been introduced to protect the livelihood of off-payroll workers, as well as ensuring that they do not come into work unnecessarily and risk getting or spreading COVID-19.
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