On 20th March 2020, the cabinet office issued guidance for public sector organisations on how to support their contingent workforce if they are unable to work due the COVID-19 pandemic.
Unfortunately, it does not seem like the guidance was widely circulated, so we’ve outlined the key points for you below:
Who is the public sector guidance for?
The guidance applies to all categories of contingent workers, including PAYE workers and those engaged through umbrella companies or their own personal service companies. Whilst the guidance note is directed to Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies, all public sector organisations are encouraged to adopt the guidance.
The cabinet office guidance states that contingent workers that are unable to work due to COVID-19 should continue to be paid at 80% of their pay up to a maximum gross pay rate of £2,500 per month. This guidance aims to provide the same levels of support to contingent workers as the Coronavirus Job Retention Scheme (CJRS). It is also aimed at supporting the entire supply chain through this challenging period and helping to reduce cashflow challenges.
How does the public sector guidance and the CJRS differ?
There are similarities between the public sector guidance and the Coronavirus Job Retention Scheme (CJRS), however there are also important differences.
The public sector guidance is an instruction to continue paying suppliers of contingent workers. There is no need for the supplier to furlough the contingent worker or apply for a grant. The supplier simply continues invoicing the public sector organisation at the reduced rate and pays the contingent worker the reduced gross pay figure.
Sick pay is also managed differently. Contractors in the public sector that are not able to work due to sickness or self-isolation should continue to be paid at 80% of their rate up to a maximum of £2,500 per month, rather than claiming Statutory Sick Pay (SSP). This is a benefit not afforded to contingent workers in the private sector under the CJRS who can only claim SSP.
Does the public sector guidance refer to all assignments?
The public sector scheme applies to live assignments and instructs public sector organisations to continue paying contingent workers until the natural end date of the assignment. Presumably, when the assignment comes to a natural end, the worker could be furloughed and a claim made under the Coronavirus Job Retention Scheme, provided they were eligible, although at present this is not clear.
In these difficult economic times, any attempts to safeguard the income of public sector contractors and suppliers is to be applauded. However, it is disappointing that the guidance does not appear to have been widely circulated. There have been reports that many within the public sector are not applying the guidance simply because they are unaware of it.
If you are a supplier or a contingent worker to a public sector organisation you can read the guidance in full here.