Coronavirus is having an unprecedented impact on our society and the economy. In these difficult times, we’ve prepared these FAQs for employers concerned about what to do.
We don’t want to make any redundancies but we need to review wage costs. What are our options?
1. Review staffing arrangements and plans for new starters.
Consider: Can they be deferred? Can the contract with them be terminated? If so, the contract terms must be applied but often there are shorter notice periods in the first part of the employment, and these can be actioned even before the start date. There are some circumstances where offers of employment can be withdrawn but this is hard to achieve where there has been clear acceptance of the terms by the proposed employee.
2. Consider the Job Retention Scheme
It is important to note that, even if you have since made redundancies / lay-offs, those employees’ costs from 1 March 2020 onwards during any time when you had no work for them, may still be eligible for the scheme if they were employed on 28 February 2020 (and reported on the RTI return (FPS) by 19 March) and, where they were made redundant, they have been rehired.
We take the view that furloughing can be applied flexibly between employees for three consecutive week periods when an entity has been severely affected by coronavirus to help them retain their employees and protect the UK economy.
Furloughing is different from short time working so careful language must be used in making this change so that the reimbursement can be secured.
3. Check whether you can suspend payments for PAYE / NIC.
4. Consider options with employees to take unpaid leave / annual leave
Employees can’t be forced to take unpaid leave - that would be a breach of contract. However, employees can agree to take unpaid leave. They are unlikely to do so if it means taking whole weeks of unpaid leave, given the loss of income. However, they may be prepared to take two weeks of unpaid leave each month for the next two months or two days of unpaid leave each week. Those placed on unpaid leave after 28 February can also be furloughed and the wage cost claimed.
Another option to reduce cost is to offer a combination of paid and unpaid leave which could be taken at different times by different groups of employees.
5. Reduced hours / part-time working
Employees may be willing to agree to reduce their hours / part time working in the short term although this will require individual consultation.
Employers with the right to place employees on short-time working will be able to reduce hours without consultation but may only want to do so if there is still a need for some work to be undertaken. Short-time working means the employer provides workers with less work and less pay. The employee remains employed and may have the right to be paid a statutory guarantee payment by their employer of up to £30 per day from 6 April 2020 for up to five days in a three-month period they are not provided with work because of short-time working. After four weeks continuous lay-off / six weeks short-time working in a 13 week period, employees can request a statutory redundancy payment where they have at least two years' continuous service.
Employees who are placed on short-time working may be entitled to Universal Credit or the new style Jobseekers Allowance. With the employer's consent, they can also work for other employers during the times they are not working for their employer.
Employers who place employees on short-time working will not be eligible for the Job Retention Scheme grant in respect of those wage costs.
Flexing between schemes and in some cases combining schemes
This may well be possible, but care is needed at each stage.
Ultimately, it’s important to communicate with your employees about what the options are. These are unprecedented circumstances and everyone will be impacted personally and professionally. Employers should also continue to monitor the ongoing changes to the Job Retention scheme and the packages of support offered by the Government.
What support is there from the Government to cover wage costs?
All UK employers can apply to HMRC for reimbursement of up to 80 per cent of furloughed employees regular 'wage costs' up to a cap of £2,500 per employee per month for wages payable from 1 March 2020 plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on paying those wages. It is to run until 30 June 2020 but will be extended if necessary. Employees must still be on the payroll as of 19 March so cannot have been made redundant or laid off. However, if the employee was on the payroll on 28 February 2020 and has been 'let go' since, the employer can still apply for reimbursement if the employee is rehired. The scheme is accessed as a minimum by:
- designating affected employees as 'furloughed' or retained on paid leave of absence;
- notifying employees of this change; and
- submitting information about these employees and their earnings via the new HMRC portal.
HMRC’s portal is operational from 20 April 2020 and states payment will be made within six working days of the claim so employers will have to bear these wage costs until then; however, other financial support may be available.
The scheme will require written agreement from furloughed employees and changes to employment contracts where employment terms are varied so consultation with impacted employees (and, in some cases, their representatives) remains required individually and, in some cases, collectively to avoid later claims cost. There is a real cash flow advantage for furloughed employees as opposed to lay off, so employee resistance is unlikely.
The Government has confirmed that schools will remain open for key workers. Who will be considered a key worker?
The Government has announced that exceptions to school closures will be made for children who are vulnerable (those who have a social worker and those with special educational needs) and to those who have one parent considered to be a ‘key worker’. They claim that the school setting is safe for this small number of children. Key workers are those essential to managing the coronavirus outbreak and include NHS staff, some teachers and social workers, workers in key public services such as the justice system, local and government workers, transport workers, postal and waste disposal workers, police and workers involved in food production including supermarket delivery drivers.
However, the need for different jobs may change in the coming weeks and the list of key workers may evolve over time.
Now that schools are closed, what should we do for employees who have to look after their children during normal working hours?
You might consider whether it is possible for the employee to work flexibly from home and wrap their work around their childcare. Alternatively, can their working patterns be rearranged or hours temporarily reduced to fit around their childcare? If that is not feasible, the employee can take annual leave or unpaid leave during this period. Employees also have the statutory right to take unpaid time off to look after their child where there is a school / nursery closure. Employees who will be discharging caring responsibilities during a furlough leave period, including childcaring, can still be furloughed.
Do we now need to make all employees work from home?
The requirement is that, if employees can work from home, they must do so. That may not be feasible because of what they do. However, employers should remember that they have a duty to provide their workforce with a safe working environment. If employees are in an at-risk category for coronavirus, they must work from home or may be furloughed.
When asking employees to work from home, employers need to consider whether the IT infrastructure is in place, there is a safe working environment and remind employees to take the usual breaks from their work. Employers will also need to remind employees of their confidentiality and data protection obligations.
If employees cannot work from home, there are precautions employers should be taking to provide a safe working environment. This may also include consideration of the means of their travel to and from work and whether that can be achieved safely.
Find out more on working from home regulations here.
What do we do about our employees who are overseas?
Current Government guidance is for all non-essential travel to be ceased for a period of 30 days. Employers should check whether the travel is essential or even possible to the destination; consider the coronavirus measures being taken in the country in which the employee is based and whether there are any travel restrictions in place or likely to be. Employers should continue to monitor the Government’s foreign travel advice here. Also Government has advised the return from abroad due to increasing travel restrictions globally which businesses will need to consider for those posted abroad.
Do we have to pay Statutory Sick Pay (SSP) when an employee has to self-isolate?
You must pay SSP if any worker or employee who is eligible for SSP, has to self-isolate because:
- they have the coronavirus;
- they have coronavirus symptoms;
- someone in their household has coronavirus symptoms; or
- they’ve been told to self-isolate by a doctor or NHS 111
Current rates of SSP from 6 April 2020 are £95.20 per week, increased from £94.25 per week up to 5 April 2020.
Can I claim Statutory Sick Pay (SSP) back from the Government?
The Government confirmed that employers with less than 250 employees as at 28 February 2020 (there is a connected employer test) can claim SSP back for each eligible employee who has been off work because of coronavirus from the first day of sickness for up to 2 weeks.
We suggest that using absence type or, if not possible, using the comments / description to clearly identify self-isolation / coronavirus related sickness in your payroll records and ensure that the coronavirus related SSP is identifiable against ‘normal SSP’ to facilitate the reclaim. Payroll software may need to be adapted.
What if an employee who is furloughed becomes unwell and is entitled to SSP?
If employers want to furlough employees who are currently off sick, they are eligible to do so but then the employee would no longer receive sick pay (either SSP or contractual sick pay) and would be classified and paid as a furloughed employee.
Can an employer claim both under the Coronavirus Job Retention Scheme and SSP reimbursement?
An employer can reclaim expenditure from each of the CJRS and the SSP rebate scheme (subject to the rules of each being applicable) for the same employee but not for the same period of time. If an employee becomes unwell during a furlough leave period, the employer can choose whether to continue to pay the employee as a furloughed employee (provided the pay is no less than SSP) or to revert to SSP or contractual sick pay after considering the impact on its ability to reclaim for either or both and the impact on its employment contract and other obligations to its employee.
When must Statutory Sick Pay (SSP) be paid from?
SSP is payable from day one and the waiting days have been waived. but for sickness related to coronavirus only.
Where an employee is on sick leave for more than seven days, do we still need to obtain medical evidence in accordance with our contracts?
By law, medical evidence is not required for the first seven days of sickness. After seven days, employers may use their discretion around the need for medical evidence. The Government has strongly advised that employers should use their discretion to allow GPs to focus on their patients at this critical time. This is the case whether or not the employee is on sick leave as a result of coronavirus. Others can now issue these certificates as well as the 111 service.
Is a pregnant employee, who has been asked to stay at home because of coronavirus, on Statutory Maternity Pay (SMP) or Statutory Sick Pay (SSP)?
If the pregnant employee stays at home due to Government guidance relating to coronavirus, it will not be classed as a pregnancy related illness and therefore normal SSP rules will apply. The employee will not be required to bring their maternity leave forward where they are in the final four weeks’ of pregnancy.
What if an employee has already exhausted their 28 weeks' Statutory Sick Pay (SSP) entitlement?
If the employee has already exhausted their 28 weeks SSP entitlement, they won’t be entitled to any more even if it is related to coronavirus. They should be given the SSP1 form and advised to claim Universal Credit / Employment and Support Allowance. Employees on long term sick leave can be furloughed.
Those with profits up to £50,000 per annum will be able to apply for a grant worth 80% of their average monthly profits over last 3 years up to £2,500 pm. The scheme is open to those across UK for at least 3 months and will be extended for longer if necessary. The scheme essentially covers the same income as employees under the Job Retention Scheme.
What if an employee wants time off to look after someone affected by coronavirus?
It is clear from the PHE guidance that those with coronavirus symptoms and any family members should self-isolate and they would therefore be entitled to SSP. The guidance on the extremely high risk and shielded makes it clear that they should also self-isolate. On that basis they should be entitled to SSP as well.
The employer should use their discretion in paying SSP since it would be fair to exercise discretion to pay it in circumstances where they have been told to self-isolate.
First, consider whether they should themselves be self-isolating according to the Government guidance in which case they may be entitled to SSP.
Alternatively, an employee may, consider their right to take unpaid time off to care for a dependent.
Employers are also entitled to furlough employees who are being shielded or off on long-term sick leave. It is up to employers to decide whether to furlough these employees.
What if an employee wants time off to look after someone affected by coronavirus?
First, consider whether they should themselves be self-isolating according to the Government guidance in which case they may be entitled to SSP. If not, consider their right to take unpaid time off to care for a dependent.
Did National Minimum Wage (NMW) rates increase on 1 April 2020?
Yes, the rates changed to £8.72 per hour from 1 April 2020 for those 25 and over with lower graduated lower rates below that age. However, these rates only apply to hours worked for the employer so furlough leave time is not included (save where training is being undertaken while on furlough leave).
Emergency Volunteering Leave to volunteer in health and social care
The Coronavirus Act 2020 introduces emergency volunteering leave to support health and social care.
Workers (in businesses with a headcount of 10 or more), including agency workers can get Government compensation where they suffer loss of earnings through emergency volunteering in health and social care, An emergency volunteer is pre-certified by the Secretary of State for Health and Social Care or the local authority to take emergency leave. Travel and subsistence (including vouchers and other benefits) can be paid to those who have acted as emergency volunteers in health and social care even if they have not taken or were not entitled to take formal emergency volunteering leave.
The volunteering period is one fixed period of 2, 3 or 4 consecutive weeks in the same 16 week period starting when the legislation comes into effect. The worker must notify their employer in writing 3 working days before the start of the proposed emergency volunteering period producing a certificate certifying both that they will be an emergency volunteer and the emergency volunteering period.
The worker remains employed by their employer during the emergency volunteering period, entitled to all the benefits of their employment, save for remuneration, They must not suffer a detriment by reason of taking emergency volunteering leave in health and social care and, if they are dismissed because of it, they are unfairly dismissed.
Can employers put arrangements in place for those who have untaken statutory leave due to the coronavirus crisis?
New regulations now in force allow the carry-over of up to four weeks statutory annual leave into the next two holiday leave years where it is not ‘reasonably practicable’ for a worker to take some, or all, of their holiday entitlement due to the coronavirus pandemic. The new regulations also restrict any employer’s right to refuse the taking of that carried over annual leave to when the employer has a ‘good reason.’
This is intended to be a temporary emergency measure to give organisations under pressure from the impact of coronavirus the flexibility to manage increased demand and to protect their workers’ right to annual leave. However. the regulations are not stated to be limited to key workers.
This supplements the existing ability to carry forward the additional 1.6-week statutory holiday entitlement into the next holiday leave year by agreement.
If you would like additional information on the human resource risks and considerations, please contact