Coronavirus – Our top 10 tips for employersApr 20, 2020
Updated 3.30pm, 20 April 2020.
Along with virtually every other part of life, it’s safe to say that coronavirus (or COVID-19) has significantly disrupted UK businesses. We set out below our top ten tips for employers to cope with coronavirus:
1. Keep up to date with Government and public health advice.
It is important for employers to keep on top of the fast-evolving situation and ensure employees are aware of the latest advice. Keeping everyone informed will reduce the risks of exposure in the workplace.
The following websites are helpful:
What is the latest news from the government regarding staff?
The Coronavirus Job Retention Scheme portal is now live and can be found here – https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
We’ve also had further guidance by way of a Treasury Direction to HMRC from the Chancellor, which can be found here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/879484/200414_CJRS_DIRECTION_-_33_FINAL_Signed.pdf and updated guidance from the Government. Unfortunately, there are some discrepancies, however, here are the headline points. The full guidance can be found here.
- Any employer in the country will be eligible that had created and started a PAYE payroll scheme on 19 March 2020, are enrolled with PAYE online (this can take up to 10 days so make sure you are enrolled now) and have a UK bank account (however, organisations who receive public funding are not expected to furlough staff);
- However, you can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI (real time information) submission on or before 19 March 2020;
- The HMRC Direction states that an employee is furloughed if:
- They have been instructed to cease all work in relation to their employment;
- The period for which they have ceased (or will cease) all work is 21 calendar days (3 weeks) or more; and
- The instruction given is by reason of circumstances arising as a result of COVID-19.
- The employee must have ceased all work for the employer, this includes work for a person connected with the employer and indirect work for the employer.
- The old government guidance said that you will need to designate staff as ‘furloughed workers’ and notify them of this change in writing and keep the record of that communication for 5 years – the new HMRC Direction states that an employee has only been instructed to cease all work if the employer and employee have agreed in writing (which can be done by email) that the employee will cease all work in relation to their employment. We therefore think it’s advisable to get express agreement from staff in writing (either by letter or email). Collective consultation also appears to apply, if necessary (i.e. if staff don’t agree to becoming furloughed). If you would like to furlough staff now, please let us know and we can help you prepare draft documentation. Alternatively, if you would like advice on obtaining express agreement, let us know;
- Claims should start from the date the employee finished work and starts furlough – not when the decision is made or when they were written to confirming their furloughed status;
- Staff TUPE’d after 19 March 2020 are eligible under the scheme;
- Employers, if they can’t maintain their current workforce because their operations have been severely affected by COVID-10 will be able to contact HMRC for a grant to cover most of the wages of staff who are furloughed (absent from work, not undertaking any work) and kept on the payroll. The need for there to be a redundancy situation has been removed – the scheme is now to provide payments to employers for employment costs resulting from COVID-19;
- You do not have to place all your staff on furlough; however, equality and discrimination laws continue to apply in the usual way;
- The minimum length an employee can be furloughed for is 3 weeks;
- Employees on sick-leave or self-isolating should get statutory sick pay but can be furloughed after this, however, short-term illness or self-isolation should not be a consideration when furloughing. You must have business reasons for needing to furlough these staff. The new HMRC Direction states that at the time the employee is told to cease work, if they are on SSP, they cannot be furloughed until that period of SSP has ended (however, if they become unfit again, they can be furloughed). We would therefore advise, if they are signed off, by way of a fit note, at the time you tell them to cease work, that you wait for that fit note to expire before furloughing them (if you have adequate business reasons, related to COVID-19, for doing so);
- Employees who are shielding (staying at home for 12 weeks following confirmation from the NHS) or off on long-term sick leave can still be furloughed – the new government guidance states that you can decide to furlough or pay them SSP;
- If an employee becomes sick whilst on furlough – you can keep them furloughed or pay them SSP;
- Employees who are unable to work because they have caring responsibilities resulting from COVID-19 can be furloughed (the government gives the example of employees that need to look after children);
- In addition, the following are eligible if paid via PAYE: office holders (including company directors) and salaried members of LLPs. The government has flagged the need for the decision to be formally adopted by the company or LLP, noted in the appropriate records and communicated in writing to the director(s) concerned. Directors can also carry out duties to fulfil the statutory obligations they owe to the company (but cannot do more than would reasonably be judged necessary for that purpose) – the new HMRC Direction has now limited this to fulfilling a duty or other obligation arising by or under an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company;
- If an employee has more than one job, they can be furloughed for each job;
- It also appears that, if contractually allowed, staff are permitted to work for another employer whilst on furlough;
- A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation – the guidance differentiates between completing an online training course for an employer whilst furloughed: in that circumstance, the staff must be paid at least National Minimum Wage (even if that is more than the 80% that will be subsidised);
- If a staff member is on enhanced maternity pay, this is included as wage costs which you can claim through the scheme;
- The grant will cover 80% of the salary of workers up to £2,500 a month (plus employer NI contributions and minimum automatic enrolment pension contributions on the subsidised wage) – discretionary commission, bonuses and non-cash payments are excluded, however, you can claim for any regular payments you are obliged to pay employees (including past overtime, fees and compulsory commission payments);
- The claim for salary should not include non-monetary benefits (including taxable benefits in kind or benefits provided through salary sacrifice schemes (including pension contributions)); however, HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements if the relevant employment contract is updated accordingly;
- Apprenticeship levy and student loans are not covered under the scheme;
- For full time or part time salaried employees, claim for their salary in their last pay period prior to 19 March 2020. If you have calculated salary as of 28 February 2020 as per the previous guidance and this is different to their salary in the last pay period prior to 19 March 2020, you can still use the first calculation for your claim;
- What about employees whose pay varies?
- If they have been employed for 12 months prior to you claiming, you can claim the higher of a) the same month’s earnings from the previous year; or b) average monthly earnings over the 2019-20 tax year;
- If they have been employed for less than a year, it is an average of their monthly earnings since they started working; or
- If they only started in February 2020, pro-rata their earnings so far.
- What about staff returning from statutory leave? For full or part time employees, use their normal salary, i.e. not their statutory leave pay. For those on variable pay, use same month’s earnings from the previous year or average monthly earnings for 2019-20 tax year;
- What about National Minimum Wage? If they are furloughed and not working, they are not entitled to it. However, note the issue with completing online training courses for an employer above.
- Furloughed employees covers full-time, part-time, agency contracts (including those employed by umbrella companies) and flexible or zero-hour contracts. Workers are eligible (provided they are paid through PAYE) and apprentices can also be furloughed, however, if they spend any time training whilst furloughed, they must be paid the appropriate minimum wage;
- The scheme also covers employees who were made redundant or stopped working for you since 28 February 2020 (as long as they were on your payroll and had been notified to HMRC on an RTI submission on or before 28 February), if they are rehired then furloughed. The scheme now says that if an employee has had multiple employers over the past year, has only worked for one of them at any one time and is being furloughed by their current employer, their former employer/s should not re-employ and furlough them;
- Employers can top up the rest if they wish to;
- The scheme will cover the cost of wages backdated to 1 March 2020 and will be open until the end of June 2020 but may be extended for longer – employers can use the scheme at any time during that period;
- What about holiday? New guidance has confirmed that staff can still take holiday whilst furloughed (however, this will need to be paid at their normal rate); and
- Can you rotate staff on and off furlough? Yes, but each separate instance must be for a period of 3 consecutive weeks. We also think it is advisable to obtain the staff’s agreement to each period of furlough.
- There is now more information in respect of wat you need to make a claim. You will need:
- your employer PAYE reference number
- the number of employees being furloughed
- National Insurance Numbers for the furloughed employees
- Names of the furloughed employees;
- Payroll/employee number for the furloughed employees (optional);
- your Self-Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number;
- the claim period (start and end date);
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks);
- your bank account number and sort code;
- your contact name; and
- your phone number.
- If you have fewer than 100 furloughed staff you will be asked to enter details of each employee you are claiming for directly into the system – this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).
- If you have 100 or more furloughed staff you will be asked to upload a file with the information rather than input it directly into the system. HMRC will accept the following file types: .xls .xlsx .csv .ods. The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional).
- You should retain all records and calculations in respect of your claims and HMRC retain the right to retrospectively audit claims.
As a reminder, following Boris Johnson’s speech, on Friday, 20 March 2020, all the following were asked to close immediately:
- Cafes, pubs and restaurants;
- Bars and nightclubs;
- A full list can be found here
Schools and colleges were also closed from Friday 20th March except to cater for key workers’ children.
On 27 March 2020, the government also announced that new legislation (The Working Time (Coronavirus) (Amendment) Regulations 2020) would be coming into force which will amend the Working Time Regulations 1998 to include the provision that: where it is not reasonably practicable for a worker to take some, or all, of the holiday to which they are entitled due to the coronavirus, they have a right to carry four weeks into the next two leave years. This will not apply to the additional 1.6 weeks (this can be carried forward currently by one year by agreement between an employer and staff).
What is emergency volunteer leave?
- A new statutory right for workers to take emergency volunteering leave to help support essential health and social care services has been introduced – but it isn’t yet known when this legislation will come into force.
- Staff who apply to emergency volunteer will receive a certificate confirming they have been approved for emergency volunteering.
- They are
then entitled to leave from work to carry out that volunteering provided that:
- No later
than 3 days before the first day of the volunteering they:
- Notify their employer in writing of their intention to be absent from work for the leave specified in the certificate; and
- Provide their employer with a copy of the certificate.
- The leave must be a period of two consecutive weeks, three consecutive weeks or four consecutive weeks and must begin and end in the same volunteering period (this will be specified on the certificate); and
- A worker can only be absent from work once in each volunteering period.
- No later than 3 days before the first day of the volunteering they:
- There are a number of exceptions where staff won’t be entitled to the leave, the salient one being if they are employed in a business which has less than 10 staff;
- Terms and conditions of employment continue during the leave (including pension), except pay – volunteers will be reimbursed by the government for loss of earnings (if they were entitled to earnings during that period), travel and subsistence; and
- After the leave, the staff have the right to return to the same job.
2. Spread Awareness
Make sure staff (especially managers) are aware of the main symptoms of coronavirus, which are:
- A persistent cough;
3. Protect your employees
Employers have health and safety obligations to keep employees informed about health risks that may arise in carrying out their duties and to ensure working practices do not create undue risks to employees.
Ensure hygienic workplace practices are enforced including the availability of clean places to wash hands with hot water and soap and encouraging staff to wash hands regularly. Also consider providing hand sanitiser and tissues if possible.
4. Know your obligations regarding sick pay
Depending on the particular situation, various rules apply so it is important to understand what should be paid to employees who are absent for reasons related to coronavirus. It may also be worth considering proactively informing employees of their contractual and statutory rights.
Where an employee is advised to self-isolate:
The government has made it clear that if NHS 111 or a doctor advises an employee or worker to self-isolate, whether or not they are displaying symptoms, they are entitled to Statutory Sick Pay from day 1. It is good practice to pay contractual sick pay where this is offered too.
Also, remember that legislation will shortly be coming in to refund employers with fewer than 250 staff for up to two weeks of Statutory Sick Pay per employee.
By way of an update, the Government has now released on-line fit notes for those who are required to self-isolate for more than 7 days.
For the first seven days off work, employees can self-certify so they don’t need any evidence for their employer. After that, employers may ask for evidence of sickness absence. Where this is related to having symptoms of coronavirus or living with someone who has symptoms, the isolation note can be used to provide evidence of the advice to self-isolate.
The link to the new self-isolation fit note is below.
Alternatively, employers may ask employees to work from home and continue to pay them as normal.
Individuals are currently being told to self-isolate if:
- They have coronavirus;
- They have the symptoms of coronavirus (in which case, they need to self-isolate for 7 days);
- Someone in their household has coronavirus symptoms (in which case, everyone must self-isolate for 14 days);
- They have been told to self-isolate by a doctor or NHS 111
Where an employee is not sick but an employer tells them not to come to work
If they fall within the government or medical guidance that requires them to self-isolate, they will be entitled to statutory sick pay from day 1.
However, if they don’t, they will usually be entitled to full pay unless they are on furlough.
Where an employee needs time off to look after someone
The normal rules relating to allowing employees time off to care for a dependant in an emergency will apply to situations linked with coronavirus. For example, if a parent becomes unexpectedly unwell. Employers should check their policies covering this situation as there is no statutory right to paid time off to look after dependants.
The amount of time off should be reasonable for the circumstances and is only to cover emergency situations, not long-term care. For example, an employee may take a couple of days off initially and if they need more time off, the employer could consider the use of their annual leave or unpaid leave or furlough (see above).
Employers should be aware of staff’s rights to request parental leave to care for a child up to the age of 18. As a reminder this is up to 18 weeks’ leave per child (which is normally unpaid – but employers should check their policies) with leave restricted to four weeks a year which must be taken in blocks of one week. Staff must give employers 21 days’ notice of their intention to take parental leave which employers can postpone for up to 6 months if their business would be unduly disrupted as a result.
5. Develop a contingency plan
To prepare for high levels of staff absence employers should:
- Consider allowing employees to work from home to keep things running;
- Make use of other methods of communication such as video conferencing rather than face to face meetings;
- If office working, ensure staff are working at least 2 metres apart/in separate rooms;
- Ensure IT systems are set up to cope with a large number of employees working remotely;
- Consider back up from external sources and identifying staff who can cover for each other;
- Ensure emergency contact details for staff are up to date;
- Identify a central reporting system for employees who are self-isolating due to coronavirus;
- If employees are working longer hours to cover for others who are self-isolating, ensure the provisions of the Working Time Regulations are being complied with, such as adequate rest breaks and total working hours;
- Have plans ready to enable the business to operate on a skeleton staff if necessary;
- Identify key services that are essential, and others that could be temporarily stood down;
- Identify staff with transferrable skills who could be transferred to more essential roles;
- Consider training employees to ensure essential roles can be covered.
6. Manage absence effectively
In order to deal with potential high levels of absence employers should:
- Promote an environment where staff feel comfortable to inform their employer if they feel unwell;
- Ensure any absence/ sickness policies clarify how an employer will deal with someone who has symptoms or has been exposed to someone who has symptoms;
- Decide how payment for absence will be treated where working from home is not possible;
- Consider the impact on staff with dependants and in particular staff caring for family members;
- Consider how to treat vulnerable staff members such as pregnant employees, those aged over 70 or those with underlying health conditions. Be aware of the government’s new shielding measures which can be found here. Those that are particularly vulnerable from the coronavirus will be contacted by the NHS shortly and will be strongly advised to stay at home at all times and avoid any face-to-face contact for a period of at least 12 weeks;
7. Ensure good communication with staff and listen to concerns
Communication is key in ensuring employees understand what needs to be done to prevent the spread of infection in the workplace. Consider circulating a Q&A document to employees to highlight where they can access updated government guidance and relevant policies. This will also minimise feelings of uncertainty and panic among employees if clear communication sets out what is expected of employees and how the employer is addressing the situation. Ensure that managers understand which sick pay and leave policies apply.
8. Ensure all staff are treated equally
Remind staff of the behaviour expected of them. Making jokes related to coronavirus or treating employees of certain nationalities differently could expose the employer to discrimination and harassment claims.
Consider anyone who may have a pre-existing health condition and be aware of additional duties required regarding disability, age and pregnancy.
9. Employees refusing to come to work
Employees may be concerned about going to work even if there have been no reported cases of coronavirus in the immediate vicinity and they have not been advised to self-isolate or are displaying any symptoms.
It is important to listen to employees’ concerns, particularly where they are vulnerable or have underlying conditions, and consider allowing them to work from home or take holiday or unpaid leave. However, employers do not have to agree to this so if an employee refuses to attend work and other options have been exhausted, disciplinary action could be appropriate.
10. If a workplace has to close
If an employer needs to close temporarily, for example if they decide to undertake a deep clean following an employee having been tested positive for coronavirus, they should have a plan in place. Arrangements allowing employees to work from home should be made so that the business can continue operating as effectively as possible.
If your business needs to close due to the effects of COVID-19, there are various options available including asking staff to take holiday (or enforcing holiday by giving the requisite notice) and lay off (if your contract permits it); however, most businesses are likely to utilise the furlough scheme.
In the worst-case scenario, if redundancies are envisaged, employers need to make sure they are complying with the current relevant law, including collective consultation requirements if this applies.