Stuart Gentle Publisher at Onrec

One hundred thousand workers may be “falling through the cracks” of the Job Retention Scheme – Institute for Employment Studies

Analysis by the Institute for Employment Studies of official data suggests that around 100 thousand workers may have fallen through the cracks of the new Job Retention Scheme, because they started for their new employer in March but weren’t on a PAYE payroll submission before the cut-off date of 19th March.

The IES estimate is based on analysis of the Labour Force Survey, Annual Survey of Hours and Earnings, and the Business Impacts of Coronavirus Survey.

These show that approximately 500 thousand people start a new job every month (as employees) and that three quarters are paid monthly – or 370 thousand people.  Assuming that 27% of these would have been furloughed, in line with the estimate for the whole workforce, then this means that 100 thousand people may have missed out.

In addition, it’s likely that a further half a million people were due to change jobs in April, but are now caught in limbo – reliant either on their old employer keeping them on as furloughed staff, or their new employer paying them without reimbursement from the scheme.

Commenting on the figure, IES Director Tony Wilson said:

“With at least half a million people starting a new job every month, it’s inevitable that people were going to fall through the cracks for the furlough scheme.  Around a hundred thousand may have missed out in March, and up to half a million people who were planning to start new jobs in April may be caught in limbo.  In reality the Job Retention Scheme alone can’t fix these problems, but one simple step would be to extend the cut-off for the scheme to 31 March.  The risks attached to this must be vanishingly small, as it’s inconceivable that employers would have fraudulently placed people on payroll in March in the hope that the government might at some point in the future pay their wages. 

“However, this still won’t help the far larger group who will have been laid off before payroll, or told that a new job no longer existed.  These people can of course claim Universal Credit, but it’s becoming clearer by the day that this isn’t proving adequate, even with the welcome increases announced last month.  So government needs to look again at some of the rules in Universal Credit – in particular to suspend the benefit cap, improve the support available for housing costs and lift the limit on savings.”