HR and employment specialist XpertHR explains the potential consequences for employers misusing the Coronavirus Job Retention Scheme, as well as examining the tricky issue of what employees can and can’t do while furloughed.
The Coronavirus Job Retention Scheme has been hugely popular and, up to 24 May 2020, around one million employers had furloughed employees in 8.4m jobs and claimed more than £15bn in grants.
Given the sums involved, HM Revenue and Customs (HMRC) recognises the potential for fraud and so far has received around 800 reports of fraudulent applications. HMRC has been clear that it will investigate any suspected abuses of the scheme, and has said it will not hesitate to take criminal action in the most serious cases.
Jo Stubbs, XpertHR’s global head of product content strategy said, “The Coronavirus Job Retention Scheme has provided a lifeline for many organisations and their employees, but like any scheme offering financial assistance, it is open to misuse. Some employers may be tempted to abuse the scheme – either by claiming on employees’ behalf without their knowledge, or by expecting employees who have been furloughed to continue working.
“It’s important employers understand the potential consequences of knowingly making a fraudulent claim. And, given the financial and reputational risks involved, employers must also ensure they are clear on what employees can and cannot do while furloughed, to avoid inadvertently opening themselves up to claims they are defrauding the scheme.”
The Coronavirus Job Retention Scheme will be closed to new entrants from 30 June 2020. From this point, employers will be able to furlough only those employees who have been furloughed for a full three-week period prior to 30 June. Wednesday 10 June is therefore the final date an employer can furlough an employee for the first time, in order for the required minimum three-week furlough period to be completed by 30 June 2020.