Jonathan Moreland

Staff blow the whistle on their Employers for making fraudulent use of the Furlough Scheme

05
Jun

It has recently been reported by the Whistle Blowing Charity, Protect, that an increasing number of calls to its advice line are from employees reporting their employer for making fraudulent use of the Government’s Coronavirus Job Retention Scheme.

36% of Coronavirus related calls taken by the advice line since the outbreak of the pandemic are linked with employees blowing the whistle on their employers and reporting “furlough fraud”.

This report is hot on the heels of HMRC announcing that 800 employees had recently informed them that their employers were fraudulently claiming money from the Furlough Scheme. 

Commons scams include

  • Employers forcing staff to work while they are on furlough
  • Instructing staff to purportedly work as volunteers while on furlough
  • Claiming furlough pay for staff who are working from home and without the employee’s knowledge

In the first two examples, the employees would receive 80% of their pay via the Furlough Scheme for carrying out their usual work. 

Interestingly, 28% of calls were from employees in the hospitality sector and 18% from the retail sector, demonstrating the issues were particularly prevalent within these two industries.

One particular example was a report of all employees at a company being furloughed, but being instructed to carry on working at the firm as volunteers.  The employees who raised concerns about this instruction were informed by their managers that the company was acting fairly.

Liz Gardner, the Chief Executive of Protect, stated, “People have simply been told to work, despite being furloughed, and they obviously feel uncomfortable about this, as it’s wrong – it is deceiving taxpayers out of money.  We have also heard from people who didn’t know they had been furloughed until they got 80% of pay for doing their usual work.”

The furlough rules are clear and employers must abide by them. 

A spokesman from HMRC stated, “We would ask anyone concerned that their employer might be abusing the Scheme to please contact us.  These reports are just one way that HMRC identifies fraud.  Claims are checked and payments may be withheld or need to be repaid if the claim is being based on dishonest or inaccurate information.  We won’t hesitate to take criminal action against the most serious cases.” 

Employers must bear in mind that:

  • HMRC’s existing penalty regime allows it to levy penalties of up to 100% for deliberate errors; and
  • Normal employment rights continue to run on and are in no way less relevant because of the pandemic.

 

If you require guidance regarding the Coronavirus Job Retention Scheme or how to apply the furlough rules, or indeed have any other queries in relation to Employment or HR law during such unprecedented times, please contact Jonathan Moreland by email at jmm@swinburnemaddison.co.uk or call him on 0191 3775063.

 

With thanks and acknowledgement to People Management for publishing the above data.

 

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