Agency staff on leave will receive 80% of their full salary after the HMRC closes the breach


HUNDREDS of thousands of agency staff, including occasional teachers and caregivers, will benefit from new government policies that will allow them to receive 80% of their full salary if they are on leave.

A loophole in the rules meant that 625,000 British workers, such as entrepreneurs, could only ask for help for a small part of their lost earnings, leaving them below the minimum wage to live on.

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Chancellor Rishi Sunak launched leave program to keep Britons employed during coronavirus pandemic1
Chancellor Rishi Sunak launched leave program to keep Britons employed during coronavirus pandemicCredit: AFP or licensors

This is related to the complicated way in which agency employees are paid through PAYE payroll with the umbrella companies.

These companies allow staff to be paid by multiple employers in a single paycheck and give them the same statutory rights as full-time workers.

To deal with the different wages paid by different employers, apex companies employ minimum wage agency workers and then supplement their wages through discretionary commissions or discretionary bonuses.

The government’s coronavirus retention program provides that the state will cover 80 percent – up to £ 2,500 per month – of the wages of workers who cannot work due to the coronavirus shutdown.

What is leave?

The goal of the government’s job retention program is to prevent one million workers from losing their jobs due to the closure.

Under this program, the government will pay 80% – up to £ 2,500 per month – of the salary of an employee who cannot work due to the impact of the coronavirus.

Workers will be kept on the payroll rather than being laid off.

The government will pay employers’ national insurance premiums for associated employers and additional retirement contributions for self-enrolled employers.

The program has been extended until the end of September (although companies will be invited to participate from August) and may be backdated to March 1, 2020.

It is available to all employees who have started a PAYE payroll system by March 1, 2020.

If you are between two jobs, have started in a new workplace or have been laid off after this date, you can ask your former employer to re-hire you to be eligible for the program.

Employers can choose to raise the wages of workers on leave by the remaining 20 percent, but they do not have to.

Companies wishing to access the program will need to speak to their employees before putting them on leave.

During their leave, staff must not undertake any work for their employer during the program.

It covers payroll wages, but does not include salary supplements such as discretionary bonuses, commissions, or tips.

Employer confusion has forced agency workers to live on 80% of the minimum wage – less than £ 7 an hour – although they generally earn much more.

Some companies have been reluctant to put workers on leave for fear of underpaying them, because once someone is put on the minimum wage, that cannot change.

Now HMRC has updated the guidelines for employees in England and Wales to include contractual discretionary bonuses when calculating the amount payable to their staff under the scheme.

The guidelines state: “When variable payments are specified in a contract and these payments are still made, these payments may become non-discretionary.

“If so, they should be included when calculating 80% of your employees’ wages. “

Tips and discretionary bonuses that are not included in your contract, such as customer money to show appreciation for a service, are still excluded from the program.

Unfortunately, the additional income cannot be backdated when the leave plan begins on March 1.

It will only affect the salary from May and will end in October.

Dr Patrick Roach of the NASUWT Teachers Union said: “The revised guidelines provide much needed clarity, which should mean that more framework companies are doing the right thing by providing teachers and paying them in full rather than ‘at 80% of the national minimum wage’.

In Scotland substitutes on leave who are on temporary fixed-term contracts will receive 80% of their full salary.

The additional remuneration for those who are not on fixed-term contracts is calculated on your average salary between January 1 and March 31, 2020.

In Northern Ireland, supply teachers are employed directly by the Department of Education, which has agreed not to lay off staff.


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