April 2020
The Easter break has hopefully given us all a chance to relax and reflect on the extraordinary times we find ourselves in. The pace at which the government has sought to respond to the Coronavirus outbreak has, at times, been quite dizzying. As employment lawyers and, more generally, commercial advisers, it has been tricky to keep up. The “information age” is as much a burden as it is a blessing – particularly when it is coming at you from all sides!
We thought it would be useful, therefore, for this E-briefing to serve as quick revision guide as to the steps the government has taken to date, under the Coronavirus Act 2020 and relevant secondary legislation, to support employers and businesses.
Coronavirus Job Retention Scheme (“Scheme”)
- All employers can claim up to 80% (or a maximum of £2,500) of furloughed employees’ monthly wage costs where their current workforce cannot be maintained because their operations have been “severely affected” by coronavirus.
- “Wages” include the regular payments employers are obliged to pay their employees (e.g past overtime, fees, compulsory commission etc) but excludes discretionary bonus and commission payments and non-cash payments. Note: Where a salary sacrifice arrangement applies, the reference pay for calculating average pay is the post-sacrificed amount. However, Covid-19 is deemed by HMRC to be a “life event” which would permit employees to opt out of the salary sacrifice scheme (without it affecting the tax treatment of the salary sacrificed to date) in order to benefit from a higher rate of pay during the furlough period. These issues around salary sacrifice are complex and further legal advice should be sought before taking action.
- The Scheme is open until 31 May 2020 and claims may be backdated to 1 March 2020. The HMRC portal expects to be open on 20 April 2020 with the first payments ready to be made on 30 April 2020.
- Anyone who was on their employer’s payroll on 19 March 2020 can be furloughed (note the change from 28 February 2020), including employees, workers, agency staff, salaried members of LLPs and company directors.
- Employees must agree to be furloughed. Records of the furlough arrangements must be kept by an employer for five years.
- The furlough period must last for at least three consecutive weeks and the employee must do no work at all for their employer during that period (although they can continue to work for another employer).
- Employees may undertake training whilst furloughed but must be paid at their normal rate of pay for doing so.
- The furloughed rate of pay can fall below National Minimum Wage (NB: this does not apply where the employee undertakes training during furlough).
- Anyone who was on their employer's payroll on or before 19 March 2020 but who has subsequently left can be re-engaged and furloughed by their old employer.
- Selection for furlough must not be discriminatory.
Statutory Sick Pay (SSP)
- Employees who cannot work due to Coronavirus, or who are self-isolating in line with government guidance, can claim SSP from the first day of sickness than from day 4 (and subject to satisfying the usual eligibility requirements for SSP).
- A Coronavirus Statutory Sick Pay Rebate Scheme has been set up to allow SME’s to recover up to two weeks’ SSP paid to employees who have coronavirus or who are self-isolating in line with government guidance.
Holidays
- The Working Time Regulations have been amended to allow workers to carry over statutory annual leave into the next two holiday years, where it has not been reasonably practicable for them to take their full holiday entitlement due to coronavirus.
- Although not official, the consensus seems to be that employees can take annual leave whilst furloughed but, if they do, they should receive their full rate of pay (and not the furlough rate) for their holiday.
Emergency Volunteer Leave
- Save in exceptional circumstances, all employees may take unpaid Emergency Volunteer Leave in blocks of 2, 3 or four weeks in order to provide support and assistance to health and social services during the Coronavirus. Provided the notification requirements are satisfied, employers cannot refuse the leave.
IR35
- The extension of the off-payroll working rules to medium and large private sector businesses has been delayed until April 2021.
Gender Pay Gap Reporting
- The April deadline for employers to report their gender pay gaps has been suspended, meaning that no enforcement action will be taken against those who have failed to do so.
Immigration
- Right to work checks have been temporarily adjusted to make things easier for employers during the Coronavirus outbreak.In particular, employers can rely on scanned documents (rather than originals) and conduct checks via video call. For further information see https://www.gov.uk/guidance/coronavirus-covid-19-right-to-work-checks.
- Work visas may be extended until 31 May 2020, upon the individual’s request, where they cannot leave the UK because of travel restrictions or self-isolation due to the coronavirus.
- Employees on all categories of visa can be furloughed.
Apprenticeships
- Apprentices can continue to train whilst being furloughed but must continue to receive at least the National Minimum Wage Apprenticeship Rate.
- The Apprenticeship Levy is still payable during any furlough period.
TUPE
- TUPE’d employees can be furloughed by their new employer.
Self-employed
- The self-employed may be able to claim a taxable grant of up to 80% of trading profits (capped at £2,500 per month) until 31 May 2020. Payments will not be made until June 2020.
For further information on any of the above, please contact Prettys Employment Team on 01473 232121 or employmentexpert@prettys.co.uk.
