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Wage Subsidy Scheme rule forcing employers to cut ties with workers – Fitzmaurice

Employers are being forced to unwilling cut ties with their workers as they have been deemed ineligible for the Covid-19 Wage Subsidy Scheme on a technicality, according to independent TD Michael Fitzmaurice.

The representative for the Roscommon-Galway constituency calls on the Minister for Finance, Paschal Donohue, to intervene and liaise with Revenue to bring the situation to a satisfactory conclusion.

Commenting on the matter, Fitzmaurice said: “The temporary wage subsidy scheme was designed to allow employers to continue to pay their employees during the Covid-19 emergency – in order for them to be able to get back to work quickly once the pandemic had passed.

“This would mean that the link between the employer and employee would not be broken and that employers could top up the employees’ wages to the levels they were receiving prior to the virus outbreak.

“However, it has emerged of late that some employers have been deemed ineligible for the scheme as they had not updated their payroll system at least once with Revenue between February 1st and March 15th.

“It is worth noting that the new real-time reporting payroll system was only rolled out in the last 12 months, so many businesses avail of professional services in order to service the system on a quarterly basis when returns are due to Revenue.

“Because of being deemed ineligible for the scheme as their payroll systems weren’t updated between the dates mentioned, some employers are being forced to cut ties with their employees as they cannot afford to pay their wages, meaning more and more people have to apply for the Covid-19 Pandemic Unemployment Payment – with more than 500,000 currently in receipt of it as it stands.

“Small and medium-sized enterprises who may have small workforces are being hit hardest. These businesses may not have a need to update their payroll system on a weekly basis as their employees’ details or wage amounts may not have changed.

“In companies like this, the turnover of staff isn’t significant compared to a larger enterprise – with many employees having worked for extended periods of time with a single employer.

“If they updated their system outside of the dates mentioned, then they are classed as ineligible for the scheme.

“This is a double-edged sword for small businesses, particularly those that are classed as essential at the moment. If a company is not eligible for the wage subsidy scheme, then they might have to temporarily lay off staff.

“But because of this, the company might not be able to carry out the work available due to a lack of man power.

“If Minister Donohue is serious about keeping people in work during these uncertain times, then he needs to intervene immediately.

“Given the uncertain times we are in, with unemployment having risen to such significant levels, it is unacceptable that employers are being forced to cut ties with employees as a result of a technicality deeming them ineligible for a support scheme.

“It flies in the face of everything that is going on at present,” Fitzmaurice concluded.

Michael Fitzmaurice TD 086-1914565