Coronavirus - Employment

Last updated, 17 April at 4:30pm

  • The Government are introducing the coronavirus job retention scheme which will see businesses able to apply for a grant of up to £2,500 a month to cover 80% of salary for those retained but not working.  Employers will be able to ‘top up’ these payments if they choose to, but this is at your employers discretion. 

  • This is available to all employers regardless of size, including charities and the not for profit sector.  These measures have been backdated to 1st March 2020. If you have already been laid off before this measure has started, then get back in touch with your employer and see if they will take you back on at the reduced pay level. this will initially available for 3 months but will be extended if necessary.

  • As of 17 April 2020, the scheme has been extended to 30 June 2020 pending further review

  • One of the key conditions of furlough is that the individual must not undertake work of any kind for the company during this time 

  • Furlough needs to be in place for a minimum of 3 weeks. Employees can be brought out of furlough after 3 weeks and then put back into furlough at a later date
    Employers will need to:

    • Designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation

    • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required). The portal area is still being developed but watch this space and we will update you as soon as this is available to use. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

  • Employment allowance will increase from £3,000 to £4,000 from 6 April 2020 (for employers whose National Insurance bill is below £100,000 in the previous tax year).​

Government guidance for employers can be found here.
Government guidance for
employees can be found here.

FURTHER JOB RETENTION SCHEME GUIDANCE

In the guidance published on 26 March 2020, the Government confirmed:

1 – Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.  More details on how to calculate will be issued before launch

2 – You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.

3 – Furloughed employees must have been on company PAYE payroll on 28 February 2020.  Employees hired after 28 February 2020 cannot be furloughed.

4 – Wage will be subject to usual income tax and other deductions.

5 – Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February.

6 – Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.

7 – Employees who are shielding in line with public health guidance can be placed on furlough.

8 – A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for the organisation; but if they are required to train they must be paid at least NLW/NMW for that time.

9 – Those on maternity / adoption / paternity / shared parental leave the normal rules for statutory payments apply but any enhanced, contractual payments can be claimed through the scheme.

10 – Fees, commissions and bonuses cannot be included in claims

11 – For salaried employees, the actual salary before tax on 28 February will be used.

12 – For those on variable pay and employed for 12+ months prior to claim, the higher of a) same months earnings for the previous year or b) average monthly earnings in the 2019/20 tax year will apply.

13 – For those on variable pay and employed for <12 months prior to claim, the average of their monthly earnings since they started work will apply. If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.

14 – Employer NIC and AE contribution on any additional top-up salary will not be funded.  Nor will any voluntary AE contributions above the 3% minimum on income above the lower limit of qualifying earnings (£512pm rising to £520pm on 5 April.

15 – Minimum furlough length is 3 weeks.  One claim can be submitted every 3 weeks.

16 – It appears that to claim you just need the number of employees being furloughed and the amount being claimed, against the possibility of a future HMRC audit.

17 – Grants will be paid via BACS to a UK bank account.

18 – All of grant must be paid to employees as gross salary.

19 – If they scheme ends but employees are unable to return to their duties, redundancy may be necessary.

20 – Furloughed employees retain the same rights eg SSP, maternity unfair dismissal etc.  It does not mention statutory paid holiday accrual!!

21 – Employees will continue to pay AE contributions unless they have opted out or cease saving.

Statutory Sick Pay 

  • Temporary new legislation allowing Statutory Sick Pay (SSP) to be paid from the first day of sickness rather than the fourth day for individuals who have coronavirus or who self-isolate in accordance with government guidelines.
    Employers will need to maintain records of employee absence and SSP.

  • Temporary extension of SSP to cover individuals who are unable to work because they have been advised to self-isolate and those caring for others within the same household who display coronavirus symptoms and have been advised to self-isolate.
    Employers will need to maintain records of employee absence and SSP.

  • Employers with fewer than 250 employees as at 28 February 2020 will be eligible for a refund of SSP costs relating to coronavirus (restricted to two weeks per employee).
    The size of an employer will be determined by the number of people they employed as of 28 February 2020.
    Employees are not required to provide a GP fit note.
    Employers will need to maintain records of employee absence and SSP.
    The Government have announced that they will work with employers over the coming months to set up repayment mechanisms.
    A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.

  • To relieve pressure on GPs, self-isolating employees will be able to obtain a notification via NHS111 which can be used as evidence for absence from work.

Holiday/Annual Leave Entitlement

  • The government have announced changes to employee annual leave entitlement following on from the Covid-19 pandemic we’re currently facing. The update means that employees who have not been able to take all their statutory leave due to Covid-19 will be able to roll these holidays over the next two leave years.

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