COVID-19 – Guidance notes on payments for contingent workers

• The Cabinet Office set out guidance on how “contracting authorities” can continue to make payments to suppliers for contingent workers impacted by COVID-19.
• Contracting authorities are Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies. Other public sector contracting authorities are encouraged to apply the approach set out in the published guidance.
• The guidance applies to contingent workers including PAYE, umbrella and Personal Service Companies.
• The guidance states all contingent workers should be able to access measures (similar to the Job Retention Scheme). This is that they should be paid at 80% of their pay rate up to a maximum of £2,500 a month which can be backdated to 1 March 2020 and will be available for at least 3 months.
• The £2,500 per month cap relates to gross pay, excluding statutory costs such as NI, holiday pay, apprenticeship levy and pension, and supplier margin. These costs should continue to be applied where applicable as normal, in addition to gross pay rate to the contingent worker.
• The guidance confirms that Personal Service Companies supplying their services to public authorities will be able to benefit from these measures.
• It only applies to contingent workers who were performing live assignments at the time at which they became unable to work as a result of COVID-19.
• Contingent workers are only entitled to these measures up until the point that their assignment is due to expire. There is no obligation to extend an assignment if the intention as that their assignment would naturally end, regardless of COVID-19.
• The guidance suggests that contingent workers continue to submit timesheets in the normal manner, but timesheet submissions should be for 80% of normal working hours.
• Statutory and supplier margin payments will be payable. Suppliers who charge a margin should add their margin to the pay made to the contingent worker.
• Suppliers must keep a record of all payments made to contingent workers on the basis described in the guidance and this must be conducted on an open book basis and may be subject to audit.
• This has been designed to provide the same level of support to contingent workers and also to support the supply chain. Suppliers should make payment to contingent workers and invoice this to the customer. This must not be claimed back additionally via the Job Retention Scheme.

See the guidance notes here.

Aspire Comment

Via the Cabinet Office Procurement Policy Note – Supplier relief due to COVID-19, contracting authorities have been urged to pay all suppliers as quickly as possible to maintain cash flow and protect jobs so that suppliers are in a position to resume normal contract delivery once the outbreak is over. This guidance even goes so far as to state that contracting authorities can consider making advance payment to suppliers if necessary.

Notably, this guidance for the public sector includes aspects which are not available to those in the private sector, most notably that the measures include PSC contractors.