Coronavirus has sparked the biggest package of economic measures in peacetime, with both employed and self-employed workers both now eligible to be paid up to 80% of their lost earnings.
But while the majority of workers have been accounted for, some fall outside the boundaries of the announcements and will be left struggling on little or no pay without further intervention.
In some industries, such as television and theatre, short-term PAYE contracts lasting just weeks or months are the norm – and sources from within the sector have told HuffPost UK that as production closes on set, many workers have either been released from their contracts or not renewed as they otherwise would have been.
Many people who take on short-term PAYE contracts might categorise themselves as self-employed or freelancers, but it seems as though that is not the case in the eyes of the government.
These workers will likely fall through the cracks of the government’s plans – unlikely to be furloughed through the employee retention scheme but ineligible to get any of the help offered to self-employed people.
Samuel Jones, a television producer in London, explained: “People on these contracts tend to have the worst of both worlds anyway, because they are employees and don’t have some of the benefits you’d have if you were self-employed, but also often aren’t on contracts for long enough to get benefits that longer-term employees would get.
“Now with coronavirus lots of these people are either unemployed, they’re not getting work that they would have got, or they’re not getting extended in the way that they would have been, and they’re being left behind.
“It’s affecting people right across the industry, but particularly those who are early on in their career and probably don’t have regular or very secure work lined up. The concern is that this could just force them out of the industry altogether.”
Bectu, the trade union for those in the creative industries, said: “Current government advice is for people on PAYE contracts to be re-hired by their previous employer to access support through the job retention scheme and we are encouraging employers to do this. However, we know that isn’t always possible and urgently raising this issue with the Treasury.”
Contract workers who were employed as of February 28 are eligible for furlough based on 80% of the salary they got in that particular job – which doesn’t help those who happened to be between jobs on that date. What’s more, many would only have carried on working for a few more weeks, so will since have finished their contracts anyway. And others will have employers who simply won’t bother applying to the scheme for such a short-term member of staff.
It’s not just the entertainment industry – or indeed those on short-term contracts – that don’t neatly fit into the government’s plans for workers threatened by coronavirus.
Rich Edwards runs Green Man and Van, an eco-friendly removals company in Tottenham working with events as the Green Party conference and doing jobs for the National Portrait Gallery, as well as house moves.
In the past few weeks, Edwards has seen his commercial contracts dry up completely and demand for residential jobs plummet amid guidance from the government to avoid moving house and stick to social distancing guidelines.
“We honoured the last few moving jobs we had before the new government guidance came in, but all of our commercial jobs were cancelled pretty quickly,” he explained.
“We’re in a position where we’re going to have to shut completely.”
Three people work for the company – Edwards, who is a director; another director; and an employee. All three of them are paid through the PAYE system. Although it’s a small company, none of them is classed as self-employed.
It’s common practice for directors of small companies to pay themselves a small amount through PAYE, with the larger proportion of their income coming from dividends – based on the profits made by the company. Though full details of the furlough scheme have not yet been released, Edwards has been advised that the 80% he is eligible to receive will be based on the PAYE money alone.
He and his fellow director earn about £700 a month through PAYE, which means they are likely to be left with an income of little more than £550 a month – causing huge financial problems for families like Edwards’s.
He said: “The details still haven’t been released in full, but it looks as though we’re going to go from being pretty comfortable to really, really struggling as a result of all this.
“We’ve been building this business for 11 years and suddenly it’s all become very precarious. With no idea of how long this is going to last it’s hard to plan any sort of future at all.
“It’s not just us – there will be thousands of small business owners who are in this position too.”
Despite having to wait until June for payment, after days of uncertainty the news that self-employed people would also be eligible to receive 80% of their income – similar to the furloughing scheme – was well received by many.
But those who have been self-employed for less than a year, and therefore not eligible for the support announced by Sunak on Thursday, were left wondering exactly how they could support themselves.
Felicity Theaker, from the east Midlands, has been working as a freelance writer for about six months. She found out on Thursday that she wouldn’t be eligible for help from the government.
“I’m in quite a fortunate position at the moment because for now I still have my job, but I have no idea how long that work is going to last,” she said.
“There’s no knowing how long this is going to go on – the prospect of having to rely on loans is quite daunting.
“We’re looking to apply for a mortgage holiday and things like that, but I can’t imagine what it must feel like to be a freelancer working somewhere like London and renting.”