‘Employers failing to top up low-income earnings of furloughed workers’

A new report on the impact of Covid-19 on low-income workers suggests few employers of workers are topping up furlough pay of the lowest paid and that this has lessons for the new Job Support Scheme coming in next month.

The Institute for Employment Studies’ interim report, The impact of COVID-19 on low-income households, is based on 40 in-depth interviews with those currently in-work as well as those who had recently lost their job across low-pay sectors such as hospitality, retail, administration and support services, as well as health and social care. It found no private sector employers it interviewed were supplementing staff wages under furlough and evidence of employers denying workers access to the furlough scheme as well as of staff who have had to leave jobs due to management failing to provide adequate protection against the threat of Covid-19

Research revealed that some respondents who worked on-demand via agencies, such as domiciliary care workers, saw a significant reduction in the hours they were being offered during lockdown. These had failed to recover following the easing of restrictions.

Others, usually working part-time hours and on zero-hours contracts, were made redundant from their job. Several respondents asked their employer why they had made this decision and why they were not being furloughed. The reasons given included their employer questioning their eligibility for the furlough scheme and being unable to calculate their furlough entitlement due to losing records of their employment from the past year.

While some – particularly in the bigger supermarkets – felt their employer had taken adequate measures to minimise the health risks posed by their job, workers in the hospitality industry meanwhile felt less protected. None of the hospitality workers that participated in the study had been provided with PPE; in all cases, they had purchased their own masks and gloves to help them feel safer at work. In the social care sector the level of safety measures taken by employers widely varying between workplaces. Some reported how their employer trivialised the need for PPE, stating that it was not necessary and that the virus was no different from seasonal flu. These individuals felt it ‘paid’ their employer to ignore the risks posed by the virus so they did not have to invest in additional equipment for staff. In these cases, interviewees either agreed to take voluntary furlough so they did not have to continue working during lockdown or resigned from their position to protect their health and wellbeing.

The IES says the research holds lessons for the next stage of the pandemic and the Job Support Scheme which takes over from the furlough scheme in November and involves workers working reduced hours and the Government and employer topping this up. Those lessons include the idea that it might be easier for some employers in low-pay industries to lay-off a section of their workforce, rather than put them on furlough; that employers are less likely to use schemes that involve them having to make a financial contribution; and the fact that individuals therefore often face having to live on less than their normal wage.

The report also called for a formal means of recourse for workers who feel their employer is not complying with official guidance on health and safety and said further steps are needed by government to ensure that these measures are enforced.

Mubin Haq, CEO, Standard Life Foundation which funded the research, said: “Low-paid workers have highlighted some of the difficulties with the existing furlough provision and this does not bode well for the chancellor’s new Jobs Support Scheme. The research found no employers in the private sector were topping up their employee’s wages under furlough but employer contributions are at the heart of the new scheme.

“This suggests the JSS will not have significant take-up in low-paid sectors, resulting in significant redundancies as well as cuts in working hours and pay. A rethink is urgently needed to avoid millions more facing financial distress.”

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