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PROSPER MAGAZINE: DIGITAL EDITION

FEATURE

TWO-THIRDS OF UK’S FURLOUGHED WORKERS CONTINUED THEIR JOBS IN COVID-19 LOCKDOWN

Male employees flouted government wage subsidy scheme more than women, survey reveals.

The majority of people who have been furloughed have carried on working during lockdown, with men significantly more likely than women to flout the rules of the scheme and work for their employer when they are not allowed to do so.

 

Working mothers have also felt more compelled to volunteer to be furloughed than working fathers, research shared exclusively with The Observer reveals.

Economists from the universities of Cambridge, Oxford and Zurich have found that “not all workers are furloughed equally”, with women significantly more likely to be furloughed than men doing the same type of job.

 

The study also found that three-quarters (75%) of furloughed men had their wages topped up beyond the 80% provided by the government, while less than two-thirds (65%) of women enjoyed this financial benefit.

 

One reason seems to be a kind of deal with the employer: my salary gets topped up, so I do some work.

 

Nearly nine out of ten (87%) men and eight out of ten women (77%) who received a salary top-up continued to work for their employer while on furlough, even though the government explicitly forbids this practice. 

 

Among those workers who didn’t receive a top-up, 69% of men and 52% of women routinely ignored this prohibition. Overall, 63% of furloughed people revealed they had spent some time working for the employer that had furloughed them, yet only 22% of furloughed men and 17% of furloughed women say they were formally asked by their employer to work.

 

“One reason seems to be a kind of deal with the employer: my salary gets topped up, so I do some 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,” said Dr Christopher Rauh, an economist at Cambridge University.

 

“Most men who can do all of their tasks from home are even working-full time. They are signalling hey, I’m a great worker.”

 

By contrast, just one in four furloughed women who can work full-time from home is choosing to do so. This may be because they have less time to devote to their jobs – previous research has found that, in general, women have taken on more childcare, homeschooling and housework during lockdown than men.

 

Rauh thinks the government should not have tried to prevent furloughed workers from working in the first place. “It’s better for everyone that people have ignored this rule. If people are working, they might be producing something which is creating some kind of value, and they are not losing their job skills.

 

“Other countries have a short-term work scheme where an employer can say: I can’t make full use of this worker, so they’ll be working 50% of the time. And then the government only has to cover that part of their salary.”

HMRC - FURLOUGH-RELATED FRAUD CASES LEAP TO 7,000

In June, figures showed that a third of furloughed staff members were asked to continue doing their job as normal, while 29% were asked to carry out more administrative tasks.

In addition, the data found that one in five has been asked to cover a colleague’s job or to work for a firm linked to their employer whilst on the Coronavirus Job Retention Scheme (CJRS). As a result of such cases, referred to as ‘furlough fraud’, HMRC confirmed the first arrest had been made in July in relation to alleged abuse of the scheme.

The unnamed man from the West Midlands, according to details obtained by The Revenue, was arrested on July 8th, in connection with claims of a £495,000 case of abuse. 

Now, HMRC has launched its main investigation into employers it suspects to have abused the scheme. Data collected by the body shows that cases of furlough-related fraud have risen to almost 7,000.

Investigations are focussed on businesses that deliberately, or inadvertently, allowed staff to work whilst on furlough and are in advance of new legislation that will introduce a 90-day amnesty for businesses.

Furlough fraud amnesty

Employment lawyer, Simon Bond from Bond Legal told Prosper, “In July 2020 the West Midlands was the location for HMRC’s first strike against furlough fraud when a 54-year-old man from Solihull was arrested.

 

"The case is a reminder of the extensive and draconian powers that HMRC can exercise in order to prevent fraud against the public purse. Computers and other digital devices were seized while funds held in a bank account relating to the man’s business have been frozen.

“More than £27.4bn has been claimed through the Job Retention Scheme and it is plain that HMRC is keen to signal that they will take action, including criminal proceedings in the most serious cases." 

Simon continued, “Earlier this month it was reported that almost 8,000 reports had been made to HMRC of suspected abuse of the furlough scheme. These include cases employers were allegedly claiming on the scheme whilst asking their employees to continue working.

“With any complex scheme it is inevitable that innocent mistakes will have been made but it is likely that, in view of the scale of the Job Retention Scheme, HMRC will want to come down hard on those who have abused the system. 

“I would recommend that employers double-check the submissions they have made to under the scheme and ensure that all their paperwork is in order.”

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