CORONAVIRUS – latest update 21/03/2020
ADVICE FOR EMPLOYERS
Given the increase in the spread of the coronavirus (COVID-19), the UK Government has stated that everybody who can do so MUST socially distance and/or self-isolate. This has resulted in the forced closure of all shops, pubs, clubs, restaurants, cafes, gyms, leisure centres and theatres. Basically, anywhere we might gather or socialise in groups. Other shops will be open such as supermarkets and we will still be able to get food which continues to be supplied as normal and exercising in the fresh air is at the moment still to be encouraged.
The advice that we’re giving below is the most up to date (but is still changing so we’ll update you as we learn more) to help you plan how you are going to manage your employees during this difficult time. If you need advice, please do not hesitate to contact us: 01325 488425 or firstname.lastname@example.org
As always follow the NHS guidance and our previous update of 20/03/2020.
On Friday 20th March 2020, the Chancellor Rishi Sunak stated:
“ … We’re setting up a new Coronavirus Job Retention Scheme.
Any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.
Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll, rather than being laid off.*
Government grants will cover 80% of the salary of retained workers up to a total of £2,500 a month – that’s above the median income.
And, of course, employers can top up salaries further if they choose to.
That means workers in any part of the UK can retain their job, even if their employer cannot afford to pay them, and be paid at least 80% of their salary.
The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and will be open initially for at least three months – and I will extend the scheme for longer if necessary.
I am placing no limit on the amount of funding available for the scheme. We will pay grants to support as many jobs as necessary …”
Key Points to be taken from this are:
- All employers are eligible
- The 80% (up to £2,500 per month) is a grant not a loan
- If employers can top up salaries up they should
- [However if not] employees will receive at least 80% of wages
- It is initially for 3 months but may be extended
- … and can be backdated to 1st March 2020
What is a “furloughed worker”?
A “furloughed worker” is
- An employee who is NOT working during this crisis period but is being paid by the company (up to the allowances paid by the Government).
- This scheme is so you do not get rid of employees but instead retain them on payroll, so when the crisis is over they will restart work. This requires you to have made a decision that in the circumstances you will have to lay them off or make them redundant. It does NOT apply to employees who are effectively working as normal or have chosen to stay at home for childcare as their jobs are not affected.
- Please note if employees are still working then you will need to pay them out of revenue generated in your business and you will NOT be able to claim the grants available as they are NOT designated as furloughed workers.
- When an employee is a furloughed worker, effectively this means they are at home on what we would normally describe as paid leave but will be receiving a reduction in normal earnings during this time.
- If part way through the crisis, you need your employee(s) to restart work because your business is not impacted to the same extent as previously, then they will cease to become furloughed workers and the responsibility for paying their normal salary will fall back to you as the employer.
It is understood that you may not have to furlough your workers immediately but may have to do so later on during the crisis, which means it’s “business as usual” for now and application will be made to the Government for grants later.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) is a Government scheme to retain people in work during this crisis and to encourage employers NOT to lay people off or make them redundant. All UK businesses are eligible.
Therefore, employees that you would normally consider laying off or making redundant due to the economic circumstances affecting your business, are the employees who can benefit from not being so treated.
- You will need to go via the HMRC portal (when it becomes available) and designate these employees as “furloughed workers”.
- Please make sure that you are doing so in line with current employment legislation – in most cases getting the employees’ agreement for this will be sufficient – please document any discussions and retain any letters so you have a written record.
- Make it clear to the employee that as a business you will only receive 80% of their wages up to a cap of £2,500 per month per employee. Therefore, this will be how much they will receive (if you wish to pay more you may do so but the Government will only pay up to these limits).
- HMRC are creating a new online portal for employers to be able to apply. Please be aware it is likely HMRC will use your RTI tax digital information on payroll as a guidance, so please don’t give pay rises to all your staff in the hope you’ll get more. In addition current indications are that you need to pay salary and apply for reimbursement of 80% of wages from HMRC.
What to do with your employees – some scenarios:
- You furlough your workers:
You need to notify your workers that they are now “furloughed” – please make sure that you’re doing this in line with good HR practice us and speak to us if you need help.
This means that the employee is sent home to self-isolate and social-distance, which is what the Government is trying to achieve.
You apply through the HMRC portal (when it’s available) declaring your workers are “furloughed” and make an application for the grants.
You are still required to pay your employees through your normal payroll, however they may only be receiving 80% of their normal salary (although you may pay more) – and you are effectively claiming the money back from HMRC.
The objective is to stop you making employees redundant or laying them off, but you will need to calculate your operational expenses whilst you have no workers – again we can support you if you need some advice.
- You have furloughed workers and you need to bring them back to work:
Your business needs workers to continue functioning so having first furloughed them, the situation improves and you then need them to come back to work.
At this point they are no longer furloughed and therefore you will not be eligible for the Government grant. The responsibility lies with you as the employer to pay them as normal at their full rate of pay.
You may however be able to get your workers to agree to taking a temporary pay cut and again we can advise you on this if needed.
- As a business you are considering redundancies or lay-offs and furloughing your staff is not an option:
Wherever possible the Government wants your business to remain viable so that when the crisis is over everything can return to normal and to not lose good employees.
This is why they have made the funding available for you to furlough your employees which means they still remain employed.
They are also offering loans and other grants to help you cover your additional overheads. You may or may not be eligible for these, but please research via the links below to find out before making any decisions.
However, you may decide that you still have no alternative and that you still need to make lay-offs and/or redundancies.
In such cases, you MUST follow appropriate employment law and best HR practice – we can support and guide you through this if needed.
- You have already made laid-off or made employees redundant:
If you have had to take decisive action and have already laid off employees or made them redundant as the CJRS can be backdated to 1st March 2020.
Technically this means you could (once the portal is live) apply to HMRC decalring those employees furloughed and therefore be able to bring them back onto payroll at 80% of their salary.
If you have already paid Statutory Redundancy Payments and notice, then this technically would be repayable by the employee. Please seek advice before taking any action either way.
- You have furloughed your workers and they do not abide by Government requirements to self-isolate or social distance:
Despite the instruction to socially-distance, there are apparently some employees who are already planning gatherings referred to as “Corona Parties”.
This is absolutely not what the Government wants to happen as this will not slow/stop the spread of the virus and is placing other people at risk.
You may consider their actions to be a breach of a reasonable instruction and consider whether disciplinary action is appropriate. Common sense needs to be applied here as we all want to get back to normal working as soon as possible.
- Your workers are not furloughed and are required to work, but they do not abide by Government requirements to self-isolate or social-distance when required to do so:
Where an employee is either showing symptoms or is in one of the “at-risk” groups and has been advised to self-isolate then they MUST do so. They should follow the procedure for obtaining an “isolation note” from NHS 111 online (https://111.nhs.uk/) and submit this to the company. They will then be entitled to SSP as stated in our previous guidance.
Another scenario may be where they go to a “Corona Party” or they lie to you about their social activities before coming into work thus placing their colleagues and customer at risk. This is a breach of health and safety and may also be a breach of a reasonable instruction; both of which are gross misconduct offences and you may consider appropriate disciplinary action as a consequence.
- Where possible, employees MUST work from home:
The Government guidance is that where you have employees that can operate from home then this should be adopted wherever possible, utilising technology as appropriate.
For the avoidance of doubt, an employee working from home is NOT furloughed, therefore you are responsible for paying them as normal and the grants from the Government are not available for these employees.
The employee should be able to and be required to demonstrate they are carrying out effective work on behalf of the company.
A “Home Working Policy” is also attached for your information.
Note that where attending the workplace is required, and/or it is not possible for employees to work from home or they are a “key worker”, then the employee continues as normal and follows appropriate guidance in respect of self-isolation and social distancing.
- Employee insists they must stay at home for childcare:
Previous guidance in respect of this still applies as they are not furloughed.
We are in unprecedented times but the Government is clear that it wants to minimise the transference of this virus to other people as much as possible, and we all need to play our part in this. The longer we don’t do this, the longer it will take to return to normal.
However, we still need to be able to have business that can function. This means you must work out whether the overheads and costs in your business are viable when all your employees are furloughed for a period of time and there is no revenue.
The furloughing of employees and Government support is provided so the employees are paid to stay at home (whilst not working) but are still employed in your company meaning they have a job to come back to. To do this your business must be placed in mothballs, so you can get going again when the crisis is over.
You may have a business that can function in some respects, such as a pub that becomes a short-term takeaway, however this means that you have normal overheads for employees unless you can get agreement for shorter term working. If you can create a viable business employing people during this time and survive this crisis, then unfortunately you may not benefit from available grants and loans but we have listed the links below for you to research to see if you’re eligible.
- Coronavirus Job Retention Scheme – HMRC will set out further details on the information required.
- Deferring VAT and Income Tax payments – This is an automatic offer with no applications required, businesses will not need to make a VAT payment during this period.
- Statutory Sick Pay relief package for SMEs – A rebate scheme is being developed and Further details will be provided in due course once the legalisation has passed.
- 12-month business rates holiday for all retail, hospitality and leisure businesses in England https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/873622/Expanded_Retail_Discount_Guidance.pdf
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief – You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000 – You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
- Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank – https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
- Covid Corporate Financing Facility (CCFF) – a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans – https://www.bankofengland.co.uk/markets/market-notices/2020/ccff-market-notice-march-2020
- HMRC Time To Pay Scheme – call HMRC’s dedicated helpline: 0800 0159 559.
The below link is the Gov.uk overall guidance in respect of this matter which will be updated by the Government as things develop.
This advice is being reviewed and updated regularly and is currently in line with Government and ACAS guidance as updated 20th March 2020.
Should you require any further advice or guidance please call us on our usual HR number of: 01325 488425 or email: email@example.com