The potential scale of furlough fraud

The potential scale of furlough fraud 

Stories emerged this week in The Guardian and on the BBC that shed light on the potential size of the problem of 'furlough fraud'. Paul Burton, Head of our specialist Employment & HR team, looks at the potential implications.

Almost 1 in 10 workers asked to work while on furlough

It was reported that nearly one in 10 workers whose wages were covered by the UK government have said their bosses asked them to work during furlough, which was against the rules of the scheme.

The information came from a report by the National Audit Office into 'Implementing employment support schemes in response to the COVID-19 pandemic', which considered how HMRC managed risks in implementing the Coronavirus Job Support Scheme (CJRS) and the Self-Emplyed Income Support Scheme (SEISS).

Key figures from the report are as follows:

9.6 million total jobs furloughed

With 1.2 million employers (61% of those eligible) making at least one CJRS claim

2 million remain on furlough 

Estimate of workforce (to nearest million) remaining furloughed based on employers surveyed, 7 to 20 September 2020

9% worked while on furlough

This is the percentage of furloughed employees in the NAO survey saying that they worked at their employer's request while furloughed.

2.6 million self-employed used SEISS

Total number of individuals who made a first grant claim to the SEISS scheme (77% of those potentially eligible) to 31 July 2020. 

We have known for some time that there has been a certain level of fraud associated with the furlough scheme, however we now have an idea of the sheer scale of the problem. This story will no doubt continue to receive significant media attention and there could evidently be trouble ahead for many businesses who broke the rules.

Furlough Fraud: Advice for Employers

In terms of our advice to employers, it is simple, do not do it and, if you believe you have made a mistake in your applications for payments, do contact HMRC as soon as possible.  Immediate action will lessen the possibility of, or at least perhaps reduce, any sanction imposed by HMRC. 

What if I was asked to work by my boss while on furlough?

Our advice to employees is that, if you do blow the whistle on your employer for applying for furlough payments while you are still working, then the law will protect you to some extent in terms of suffering a detriment or dismissal for doing so. 

In such circumstances you may have a whistle-blowing claim in the employment tribunal.

Specialist Employment Solicitors in Bournemouth, Poole, Christchurch and The New Forest

Our specialist employment law & HR team have advised many businesses and employees on such matters. 

We offer a free initial chat with one of our bright, friendly lawyers to all new clients. Call us on 01202 499255 or visit the contact us page to get in touch.

Employment law updates 

We will post any announcements, along with advice for employers and HR professionals as soon as we are able. These will be shared on our website and on social media.

Our Employment and HR newsletter will continue to be sent out monthly, though as important information is announced by the government, we may send this to you more frequently.

Our quarterly employment training sessions are postponed until further notice, and we are hosting them online instead. Sign up to our newsletter to receive invitations.