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COVID-19 : Employees

At this most difficult time employees welfare must take first place. Ensure that you are able to support them as best you can in terms of hygiene at work, support for home working, etc.

  1. Check whether you can suspend payments for PAYE / NIC. A dedicated helpline has been set up by HMRC at 0800 0159 559 and further guidance is available from the government website.
  2. Employees should work from home unless they are critical and can’t carry out their work from home. In many instances this may not be possible. As an employer you should remember that you have a duty to provide your workforce with a safe working environment. Any employee in an at-risk category should be asked to work from home and if this is not possible then you should discuss alternative solutions, including taking holiday, unpaid leave or considering the furloughed guidance (see below).

Do not forget that when asking employees to work from home that other obligations will still apply such as GDPR compliance and such like. Make sure that these considerations are documented and that employees understand them – for example consideration may need to be given to confidentiality when on the telephone in a home environment.

  1. With schools closed, employees will have to balance childcare and work. If your employees are critical, consideration should be given to changing/rearranging shifts where possible. Remember, employees do have the statutory right to take unpaid leave where the school is closed.
  2. There are special provisions for statutory sick pay (SSP). In essence these remain as before but the key difference is employees who self-isolate can complete an online form to enable the employer to claim SSP from the first day of absence. It is important to note that the limits of 24 weeks still applies for the total SSP claimed in the year if you have staff on long term sick leave.
  3. The Coronavirus Job Protection Scheme (CJRS) has become a focus of support for many businesses. Before considering the grant though think about what the business needs are and make appropriate plans – review staffing requirements and the needs of the business to continue serving customers, taking in orders and processing business critical data.

Only once you have done that consider how the CJRS supports your plans or impedes them (for more information on CJRS see below).

Consider alternatives, such as:

  • Reducing pay
  • Furloughing employees with or without claiming CJRS – the furlough arrangements may give you more time to consider this but at the end of the day you need to do what’s right for the business longer term.
  • Reduced working hours and therefore pay
  • Taking paid holiday – especially where employees have carried over holiday from an earlier period
  • Taking unpaid holiday
  • Make appropriate redundancies

You cannot force these but in the current situation employees are very understanding. The Government has put in considerable support for individuals who need it including suspending mortgages or rent, which should help those affected by reduced earnings, for whatever reason.

In the event of making redundancies a lot of help can be found on the ACAS website as to how to calculate redundancy pay and the steps that you must take, including guidance on consultation.

  1. If you do decide to furlough employees and claim the grant under the CJRS, you 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
    • In order to make a claim under the CJRS, you will need:
      • your PAYE reference number
      • the number of employees being furloughed – but not the names
      • the claim period – start and end date
      • amount claimed – per the minimum length of furloughing of 3 weeks
      • your bank account number and sort code
      • your contact name
      • your phone number

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

HMRC will reimburse 80% of furloughed workers salaries, up to a cap of £2,500 per month and it is believed that the grant will also cover employer’s NIC and the basic employer’s pension contribution.

  • All employers are eligible and it will be for the employer to claim payment under the Scheme.
  • It applies to anyone who was on the payroll under PAYE at the end of February.
  • It is meant to support those ‘who the employer cannot afford to pay’.
  • The worker must be one who would otherwise be ‘laid off, likely to be those employees who would be sent home without pay, as well as those who might otherwise be dismissed due to redundancy arising from a lack of work.
  • The Scheme is due to be up and running by the end of April 2020 and will be back dated backdated to 1 March 2020 so, for example, those made redundant after 29 February can be reemployed.

There are still many questions which will eventually be clarified by either the legislation, when it comes, or later on case law. The guidance note can be found here:

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme

Many clients have asked whether employees can continue to support the business whilst furloughed (and making a claim under the CJRS). The guidance states:

Once you are on furlough you will not be able to work for your employer, but you can undertake training or volunteer subject to public health guidance, as long as you’re not:

  • making money for your employer
  • providing services to your employer

If workers are required to for example, complete training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

In various conversations with other professional advisers it does therefore appear to be that a furloughed employee, whose “cost” is covered under the CJRS provisions cannot do any work for the employer – even if the employer “tops up” the pay!

The only exception to this is for furloughed Directors, who are allowed to carry out their statutory duty – for example signing off the Financial Statements.

In order to Furlough employees you will need to agree the change with your employees and you should consider taking appropriate legal advice, as it is possible that you will need to engage in a collective consultation process to agree the changes to the employee’s terms of employment.

Some employers, in particular, may want to consider the impact that furloughing employees has on their length of service and the consequences of retaining them rather than considering redundancies.

The funding is for and to the employer – and not the employee – in the event that it was wrongfully claimed then the employer will be liable to make good the over claim. At the time of writing it does appear that you can furlough employees, claim under the CJRS and then make them redundant – although it is not clear whether having done so the employer has to repay any or all of the grant!

 


 

We will seek to inform you with any critical updates as they occur, updating this Operational Guide for Management as necessary.

Should you have any comments, questions or wish to discuss any of the above with us or need help in deciding what to do please contact your usual EMC Consultant or Michael Pay on michael.pay@emcltd.co.uk or +44(0)1273 945 984.

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