Time to protect jobs
The government has confirmed that employment businesses are eligible to apply for the business rates retail discount. Recruiters are eligible for the scheme, whether their office is now closed or not.
However, the REC has warned the government against its decision that employment businesses should continue paying the apprenticeship levy, applicable to businesses with payrolls above £3 million, where workers are being furloughed.
Neil Carberry, CEO of the Recruitment & Employment Confederation (REC), said:
“The inclusion of high-street employment agencies for the business rates retail discount is great news. We have called for the government to do this from the outset when the discounted scheme was announced. This will make a real practical difference to the cashflow of employment businesses as they navigate through this crisis. Expanding Statutory Sick Pay to cover businesses with more than 250 employees is the extra step we need to steady the jobs market and protect businesses.”
“It is disappointing that the government has decided that businesses should continue to pay the apprenticeship levy whilst furloughing workers on the Job Retention Scheme. Recruitment businesses with a large number of agency workers on payroll are already being penalised by the levy system, as they have to pay but cannot use the funds to train those workers. The requirement of apprenticeship levy payments during this time of crisis is a real and difficult extra cost for recruiters who need to furlough agency workers. It may mean furloughing staff is not financially viable for employment businesses. We urge the government to re-think this decision as a matter of urgency.”
This latest guidance is very welcome - the REC asked for this this relief for employment businesses in a four-point plan submitted to government a few weeks ago (20 Mar):
Four steps to help Britain stay in work
Employment businesses keep us in work, placing a million people into new jobs every year, and a million temps into workplaces every day. They need support now.
There is a crisis in the jobs market, with hiring slowing down. But this is not a normal recession – it is a short-run dip caused by the Covid-19 virus.
Without action, there's a huge risk we will lose critical economic capacity to find work and grow careers. Recruiters need support, just like other vital sectors, so they can help the UK recover.
The large-scale loan facility announced by the Chancellor and the welcome change to tax rules for freelancers (IR35) were good steps. But more needs to be done.
We believe the following steps are necessary, immediately:
1. Focus on cashflow support to businesses
The situation is very urgent, but hopefully short-term. Firms in key sectors can’t wait long to know when they will get support – but they also shouldn’t need it for long. Programmes already announced need to hit bank accounts quickly – and government can do more to keep firms going in the short-term:
- Support for wages and relief on payment timescales for VAT and PAYE revenues
- Extending the business rates discount to recruiters, and
- Rent holidays for businesses.
2. Fund Statutory Sick Pay for every worker, with quicker access to state support
All businesses want to provide access to sick pay, but in a pandemic-induced recession, firms will struggle to pay it. State support for SSP for all employers is essential - up to 14 days for all workers, regardless of how they are employed or by whom. And employment agencies must be treated as small employers if they employ fewer than 250 staff – temporary workers placed with clients should not count.
Only about 20% of agency jobs can be done remotely. So at this time of disruption, it is also essential to ensure agency workers can access the benefits system quickly if work isn’t available.
3. Help recruiters help the NHS and other critical sectors
Harnessing the expertise of recruiters in health, social care, education and logistics will be crucial as we tackle the virus. Recruiters are key workers in these sectors. A new partnership between the Government and healthcare recruiters can get staff where they need to be efficiently and effectively to deal with this emergency.
4. Find people work quickly but safely
In the current situation, we need compliant and safe alternatives to face-to-face Right to Work checks. Work with us to make this happen.
These four steps will help Britain stay in work.
Recruiters are also ready to do more, through sharing:
- Expertise - We can harness this plus our drive and contacts to ensure that key workers are placed into front-line roles quickly. Flexible and agile resourcing is more important than ever.
- Transitions - As part of our partnership with DWP, we will help those affected by the crisis to transition into new roles. Recruiters can also support the BEIS Emergency Volunteering initiative.
- Intelligence - We will provide updates and solutions to emerging labour market challenges.
Urgent government action is needed to support recruitment businesses through the current crisis. But recruiters will also do their part and we will pay that support back.
Keeping the economic engine oiled
Employment businesses keep the UK working. Recruiters place a million people into new jobs every year and a million temps into workplaces every day. They need support now to keep the economic engine oiled. The large-scale loan facility announced by the Chancellor and the welcome change to tax rules for freelancers (IR35) were good steps. But more needs to be done at speed.
The government must take urgent steps to protect workers by funding statutory sick pay for everyone, regardless of how they are employed or who they work for. Agency workers are a vital part of the workforce, especially during a crisis – we must also ensure that they can access the benefits system quickly if work isn’t available.
We also need to make sure that companies have the cash they need to stay afloat and keep people in their jobs. Flexible payment timeframes for VAT and PAYE, discounted business rates for recruiters and business rent holidays will help the industry to tackle the cashflow problem caused by Coronavirus.
This is an unprecedented emergency and the recruitment industry is part of the solution. We can harness our expertise, our drive and contacts to ensure that key workers are placed into front-line roles quickly and help those who lose their jobs to make the transition back into work during this crisis. We are asking that the government support us in doing this.