During the pandemic, as reported by the BBC, more than one employees were furloughed. It means that these people were staying home without a salary, due to constrained economic resources of the employers and the companies. The government brought a scheme, called as Coronavirus job retention Scheme, to pay 80% of the employees’ salaries to allay this issue. It covered almost nine million workers of the United Kingdom. This scheme was available till October 31, 2020, which has now extended to March due to the second phase of the lock down. The government was regarded to pay this all amount, but amid this situation, the law firms seemed busy repaying the furlough cashback to the government. Why Law Firms Repay Furlough Cashback to The Government
Many UK law firms started paying back to the government because their business during the pandemic grew much powerful. It was even better than what was initially expected of it. Though the firms were struck at the beginning of the pandemic and they sent their employees on a furlough. Later, the firms started generating revenue and they soon stabilized themselves. Solicitors in Manchester, also, feared the redundancy at the beginning of the pandemic due to a report stating that tens of thousands of people would be furloughed in the pandemic. By September 2020, an amount of £215 million was reported to refund voluntarily. The volunteers included major brands, major housebuilding firms, and law firms that have paid back the amount they claimed through the Coronavirus job retention scheme. The furlough cash that the government pays to the employees is always due to pay back. There were also some strong firms that did not take the furlough cash from the government at all
Also, the number of employees sent on a furlough, in law firms, was significantly minute than the number of employees sent out in other companies. This means that a, comparatively, little amount was taken from the government which was easy to pay back amid strong business trends. This made it easier and comfortable for law firms to voluntarily payback. Many big law firm heads responded that the brand image is one thing. And if one is generating revenue and able to go on the track, to pay monthly wages of all the employees, then it is ethically wrong to take anymore furlough amount and even not to pay it back. Bottom Line
When a company begins generating revenue, it starts paying the cashback to the government. But this time the situation was different. Most of the countries, even the countries struggling with economies, launched packages for people who were left unemployed due to the pandemic. Similarly, the government of the United Kingdom launched this package for the welfare of the unemployed. It did not announce whether the amount was due to paying back or not. And some of the firms, including the law firms, jumped in to pay back the amount willingly. Some small law firms did not pay back the amount. But they claimed little amount the next time when they appealed of furlough grants.
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October 2021
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