Third of employees asked to commit furlough fraud

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New research suggests that about a third of employees have been asked to commit furlough fraud during the Covid-19 lockdown with staff experiencing pay cuts and deportation threats in addition to being furloughed.

According to a survey by Crossland Employment Solicitors, 34% of employees have been asked by their bosses to work while being furloughed by their company. At one manufacturing firm, staff received a 20% pay cut as well as being expected to continue working while furloughed. And some employees working for firms with a sponsor licence had been threatened with deportation unless they agreed to the furlough fraud.

The managing director of Crossland, Beverley Sunderland, presenting the results, warned HR not to passively allow fraud to take place.

A third of furloughed employees were asked to carry on doing their usual jobs, while 29% were told to undertake more administrative tasks. One in five have been asked to either cover someone else’s job or to work for a company linked to their employer while on furlough.

The government earlier this week announced plans to give employers a 30-day window of opportunity to confess to furlough fraud and is rushing through legislation giving powers to impose penalties and to pursue directors of insolvent companies personally. This will become law in early July.

Meanwhile, the HMRC has announced it has had 3,000 complaints so far from furloughed employees concerning fraud. At the end of May the figure was 1,900.

Furlough rules under the Coronavirus Job Retention Scheme stipulate that employers mustn’t ask staff to provide any services or generate an income for their employers when on furlough.

Crossland’s survey of 2,000 employees found that an equal number of SMEs and large companies were breaking the rules of the CJRS across manufacturing, construction, accounting, IT, marketing and PR.

Sunderland said: “Until 1 July employers are only allowed to ask furloughed employees to undertake training, yet a third of the employees surveyed were asked to work, potentially making the company money and so increasing their profits and the government will pick up 80% of the employee’s wage and could potentially foot a bill of billions in fraudulent furlough wage claims.

“Like any fraud, this is a serious offence and an exploitation of employees. As it is fraud on the Treasury then an employer could be imposed with a hefty fine and potentially face imprisonment.”

She added: “Since the Coronavirus Job Retention Scheme was launched [on 20 March], we’ve received an avalanche of calls to our office from worried employees, all unrelated to our own clients and many with the same story; ‘I’ve been furloughed but my employer has asked me to keep working’.

“In one case in the manufacturing sector the employer had not only asked the furloughed employee to work but had also imposed a 20% pay cut, so their workforce was costing them nothing. We heard from employees in the graphic design industry, some had been asked to continue working one day a week so they could be paid 100% of their salary.

“We’ve had cases of employees working on a work permit [sponsorship licence] in the professional services industry told they must continue working when furloughed or face being dismissed and asked to leave the country; furloughed employees in the appliance-fitting business asked to carry out orders to justify the ‘money’ they were being paid; and investment companies trying to use the scheme as an alternative to performance management – if an employee isn’t hitting target, they were furloughed or threatened with furlough.”

If HR is aware that their employer is asking employees to work when they are furloughed then this places them in a difficult position as they are complicit in a fraud. They should at the very least send a note to the directors of the company pointing out that this is a fraud and that they should not be doing it” – Beverley Sunderland, Crossland Employment Solicitors

She also said many people were carrying on working without knowing they had been furloughed with the government’s money going straight to the employer. People don’t necessarily know through their wage slips what their situation is.

Sunderland said some employers seemed to be targeting those they felt were less likely to complain, such as those on work visas; with a larger proportion of women saying that although they had been asked to work their also furloughed male colleague wasn’t.

As for HR’s role, Sunderland told Personnel Today that it was quite possible that it wasn’t aware of what the company was up to: “Employees who are asked to work while furloughed should always copy in HR to correspondence as there is a chance that HR are not aware of what is going on, especially if they are furloughed as well, or working from home.

“If HR is aware that their employer is asking employees to work when they are furloughed then this places them in a difficult position as they are complicit in a fraud. They should at the very least send a note to the directors of the company pointing out that this is a fraud and that they should not be doing it.

“They should also consider an anonymous complaint to HMRC and keep a screen shot of this should they be questioned in the future by HMRC. This will then protect them should their employer dismiss them for raising it as they will have a whistleblowing claim, irrespective of how long they have been employed for.”

She told the BBC’s Jeremy Vine show today that potential whistleblowers would be worried about losing their job in the context of a coming recession and perhaps would be persuaded to go along with the situation in the knowledge that there is a huge backlog of cases at employment tribunals.

Sunderland added that with the rules changing from 1 July there was likely to be less exploitation of the system, because employers could bring previously furloughed employees back to work for varying amounts of time, while still under the CJRS. However, she pointed out, this would not stop employers saying that the employee only worked one day when in fact they worked four.

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9 Responses to Third of employees asked to commit furlough fraud

  1. Avatar
    Zohaib Ibrahim 18 Jun 2020 at 11:44 pm #

    Wonder what HMRC are doing about it though?They need to be quick before the employers delete every shred of evidence meaning that they cannot catch them out!!!

    • Avatar
      Anonymous 23 Jun 2020 at 11:37 am #

      Disgusting isn’t it? I think we have conversed on previous threads before but my director has extended our “furlough” even though we are still being asked to carry out work. HMRC just don’t seem to want to know though. At first when I called them it was a case of because I’m not in a director’s position they can’t do anything. Then I decided to submit the forms but heard absolutely nothing. These company directors must be laughing behind our backs knowing that they can play us due to HMRC’s incompetence even when they know that they are guilty as! As you say, they’ll remove all the evidence to prove that we haven’t been working. I’m the only one at my workplace who has spoken up, nobody else will say anything.

      • Avatar
        Anonynous 24 Jun 2020 at 6:59 pm #

        Im aswell on furlough and work place keep calling me in for 2 days job a week, there was weeks i work for 4 days and 3 days. im regulary work 2 days a week for them and they claiming it in that i dont work at all.. Im confused and stressed out as dont know how to deal with that, i dont wana loose my job as im going to buy a house next year. Aswell if i loose job is harder to find one as every bussinis is in bad possition…

  2. Avatar
    Rob 26 Jun 2020 at 10:28 am #

    It’s a very trying time for all. I have been shielding for my partner who suffers from quite severe asthma and I am BAME myself. I have spent the last two months doing all of the shopping and disinfecting everything multiple times a day.

    My company has been open from two weeks into the lockdown, forcing staff to work and only paying some of them the 80% the government has handed out. Some of the other employees are in even more precarious positions health wise than me. One has a partner who is fighting cancer right now. All of the job roles are customer facing in this business, so there is no escape from mixing with the public. As far as I know, I am the only one who has fought this as I don’t want to spread the disease to the vulnerable, nor do I want to be complicit in fraud.

    I sent a report to the HMRC and spoke to them over the phone multiple times. I have heard absolutely nothing back. This entire pandemic has been handled farcically and once again we are seeing the scum of the world rise to the top and benefit from the suffering of other people.

    • Avatar
      Anonymous 1 Jul 2020 at 6:03 pm #

      Rob, you took the words completely out my mouth. I’m sorry to hear about your situation but welcome to the club! They handled it awfully have HMRC & they definitely will not catch out the cheats. I reported the company director numerous times & you’d think that would register with them, but the company director was still able to obtain a furlough extension & we’re still being told to work. Like you say, company directors will not receive any punishment even if they have committed furlough fraud.

  3. Avatar
    Greg 3 Jul 2020 at 7:14 pm #

    My accountant openly told me that he furloughed his staff but got them to work on my (and others) accounts despite it being illegal to do so. It made me feel awful that they were being made to do all this stuff illegally. I’m in the process of looking for a new accountant because frankly I was appalled to hear it. In these hard times, I’ve had to furlough my staff but rules are rules and I wouldn’t make them work whilst furloughed.

  4. Avatar
    sam 7 Jul 2020 at 3:55 am #

    my employyer ask me to come back to work for a part time around 15 hours a week but i will not get paid for that because already im getting paid 80% from furlough and if i will not eccept he will take me off from furlough
    is it ligal what he ask me for
    regards

  5. Avatar
    Jason howell 10 Jul 2020 at 11:49 am #

    I am currently still on furlough, half of the work force are back working they are even telling them to work overtime to keep up with work demands some are even doing my job instead of my employer asking me to go back to work, from what i can gather my employers are taking advantage of the work retention scheme and now they will be offered £1000 for each employee on furlough they keep on until end of jan 2021. So from this date there will be £10.000 in the pot which they will use towards redundancy pay outs so it’s a win win for companys. My main question is how can i found out if my employer is claiming furlough for those workers still that are back in work. Something to add if i am made redundant is it correct that my time on furlough will not be added to my service with company? if so this is unfair as throughout furlough i have still been paying my taxes.

  6. Avatar
    Alan Harwood 29 Jul 2020 at 10:37 pm #

    My boss has had me working on Ferlough and I didn’t know what do I do about it it’s not fare

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