Update Tuesday 24th March
Latest news and guidance for Employers and HR planning.
With further detail from HMRC now published, below is an updated summary of the support package for businesses and employers announced by the Chancellor and what we as employers should be planning now.
Please feel free to share this article on.
‘Unprecedented Measures for unprecedented times’
The Chancellor launched an unlimited rescue package to pay workers and businesses, as the PM announced new coronavirus pandemic measures locking down the UK with closure of all pubs clubs, restaurants, theatres and gyms; (with no panic buying of alcohol we hope).
The most helpful measures in this support package will be the ‘Job Retention Scheme’ and the ‘Business Interruption Loan Scheme’. More details on the practicalities of these will follow in the coming days. For now, here is what you need to know about these, and the other support measures the Government is putting in place.
- Anyone who cannot work because of the coronavirus pandemic will be paid 80% of their wages by the Government, as long they are not made redundant.
- The Coronavirus job retention scheme will pay up to a max £2,500 per worker each month to businesses.
- The Chancellor said the Government would pick up the bill for anyone ‘furloughed’ by the crisis, to remove the need to lay people off.
(‘Furlough’ is a US term meaning temporary ‘leave’ of employees due to economic conditions)
- Employers are to apply for a grant (not a loan) via HMRC.
- Qualifying workers will be those on an employer’s reported PAYE online system at 28th February used for monthly reporting to HMRC.
- This applies to all employers of all sizes, across all industries including charities and those in the not-for-profit sector.
That being said, HMRC are saying that in order to qualify for the scheme workers should not undertake to work for their employers while they are furloughed. So we think this scheme is designed particularly for the workers who deliver services on-site, e.g in retail, leisure, restaurant and pubs as the UK goes into this lock down phase.
- HMRC are saying that the grant will fund 80% of the wages so employers can choose whether to pay the remaining 20% of the wages.
We don’t yet know if there are any PAYE/NI to be assessed on the wages paid.
- The grant will apply for salaries paid between 1st March to 31st May 2020 for now, but the scheme will be reviewed and could be extended.
First coronavirus retention scheme payments should be received by the end of April 2020.
But we would advise businesses to plan to receive funds in May, as the Chancellor said HMRC are having to build a new system to deliver this payment.
This comes following the PM’s call and pledge to business to “stand by your workers, because the Government will stand by you”.
The Chancellor said the commitment was open ended and there was no limited on this funding, admitting he had no idea how much it would cost.
What does ‘furloughed worker’ mean?
What does it mean for your organisation? What do you need to do?
Read more about how to furlough employees in our latest briefing note and Q&A on the steps employers need to take to take to furlough workers.
This will be different for each organisation get in touch if you need our help or have queries.
Below are the best pages to check on these and all Further details are contained in the 20th March HMRC updates on GOV.UK:
HMRC say these arrangements will need to be stated to employees so they know they are being furloughed and we are planning for a variation in employment contracts.
We are here to help you design the right changes for presentation to your staff depending on your cashflow position and the letters varying the employment contract.
Extension of the Coronavirus Loan Scheme
This is the Coronavirus Business Interruption Loan Scheme (CBILS) first announced by the Chancellor on Wednesday 18th (which he hoped at the time would prove sufficient to stop companies laying off workers).
- Interest free loans under this scheme will now be available for 12 rather than 6 months.
- We are told these will be available from Monday 23rd March, from the banks and finance sector.
We advise calling your bank to check on the Coronavirus Loan Scheme.
We ‘test called’ an HSBC helpline following the announcement on Friday. HSBC told us they have set up their initial processes and an online application for the Loan can be made.
- Larger companies will also be able to access the scheme and obtain additional support in time.
Deferral of the next quarters VAT
- The VAT payable for any VAT quarter ending from today (i.e 31st March 2020) until 30th June 2020 does not need to be paid by the usual date and can be deferred to 31 December 2020.
- Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
- This is an automatic offer with no application required.
The Chancellor announced this is the equivalent to a £30 billion injection into the economy, equal to 1.5% of GDP.
Extension of SSP for coronavirus self-isolation & deferred tax payments for self-employed
- Self-employed workers will be able to claim SSP if they need to self-isolate as a result of the virus.
- Next self-assessment payments (usually due on 31st June) can be deferred to 31st January 2021.
Protection for unemployed workers
- Universal Credit Payments and Working Tax Credit Payments will be increased by £1000. Further details awaited from Dept of Work & Pensions.
Relief for residential tenants paying rents
- Government to fund 30% of market rent payments via the local housing benefits and universal credit system. Further details are awaited.
The situation will continue to unfold. We have set out below a list of approaches for employers to consider in this next phase, which we have been deploying with clients, and which follow best practice.
If you want to talk through your plans or need specific advice please call on 0208 255 1914 or 0203 755 5288 or email me.
We are here to help.
What actions should employers be taking now?
- Still assess the level of change in demand from customers and clients that you are seeing, and match the staffing needs to that level of demand.
- Introduce flexible (home working) / reduced working hours as business requirements (and of course the Government Lockdowndictates).
This usually will be more effective, and save cashflow, than immediate redundancies; whilst being easier for/on employees too.
Clear communication with employees is a must, and in our experience staff respond better to clear communication and an agreed change in working arrangements, for example moving to home working or to working 3 days a week with a short term reduction in salary.
Part time working will also give staff time to assist their families (e.g elderly relatives) in adapting to the virus-required changes.
It also allows employers to retain skills and experience ready for when the virus has passed and work returns to more normal patterns, often building employee loyalty on the way.
Now that the Chancellor has announced the Coronavirus Job Retention Scheme, we are advising businesses in very difficult cashflow situations to look at what can be paid for March and April payroll and confirm to employees what can be paid.
Assuming the grants under the scheme are received in late April/May then by agreement salaries would be topped upto the 80% of salary level (maximum £2,500 per worker) when the grants are received and workers remain furloughed.
HMRC say these arrangements will need to be stated to employees and we are planning for a variation in employment contracts.
We are here to help you design the right changes for presentation to your staff depending upon the cashflow position and the letters varying the employment contract.
- Now may still not be the time for any hasty redundancies which, in the short term use up even more cashflow paying the salary and benefits for employees’ notice periods and the statutory redundancy payment for employees with at least 2 years service.
- The Government also announced that mortgage lenders will provide a 3 month mortgage payment holiday for home owners, £1 billion support for renters.
Communicate these changes to your staff as soon as you can.
- Assess whether you will have enough people to keep business-critical operations running if you do face staff shortages. Think about transferable skills, and start training people.
- Under health and safety law, employers are under a duty to provide a safe working environment for their staff, but there is also strong moral responsibility to ensure employees feel safe and secure. Employers need to follow the Government’s advice on self-isolation of workers and other measures for dealing with the virus. Details in the links below.
- For example: split staff into smaller (skeleton) ‘A&B’ teams wherever possible, so that if one team ‘A’ has a member become sick or needs to self-isolate, that team member and the rest of the team work from home, and the B team with “fit” staff do more work at the office.
- Maintain clear communication with staff about the organisation’s contingency plans and policies. And communicate when the plans will next be reviewed.
Possible actions, depending upon business requirements and staff profiles
Some of the issues that you should consider from an employment law perspective include:
Sick leave / caring for family members & Sick Pay
- Any staff who have to self-isolate or be quarantined under the Health Protection (Coronavirus) Regulations 2020 passed recently are deemed to be sick and would receive contractual sick pay or, if there is no contractual sick pay, then Statutory Sick Pay (SSP).
Staff do not need to go to their GP to get a sick note.
The Government is advising people not to visit their GP but instead to self isolate at home for 7 days, use the NHS website for help and
call NHS 111 only:
– if they cannot cope with their symptoms at home,
– cannot get help online.
– if their symptoms deteriorate
– if symptoms do not get better after 7 days.
SSP is paid at £94.25 per week. SSP will be payable for 14 days by employers directly to staff and employers with less than 250 staff will be able to claim it back from the Government.
Your workers on zero hours contracts are entitled to sick pay if they have done some work for you and have earned on average £118 or above per week.
The Government has indicated that it is making plans for anyone not eligible for sick pay, who needs to self isolate due to the virus.
The self employed now qualify for SSP, as we stated above.
Those earning less than £118 per week appear not yet to qualify for SSP
Those working in the gig economy will be able to claim universal credit and/or contributory Employment and Support allowance. Watch out for announcements outlining how this will work.
Look out for these upcoming details and communicate as soon as they become available, to reassure staff.
- Plan for a greater percentage of your staff having to self-isolate, as the Government is requiring whole households to self-isolate for 14 days at home if one family member is sick (i.e has a new persistent cough, or a fever, which are the main early symptoms of the virus).
- Employers can decide to require staff to stay at / work from home and so would continue to pay staff full salary and benefits where staff are not sick but working from home.
- Staff may use their statutory rights to time off to care for dependants (short – term unpaid leave) or can use annual leave or parental leave as applicable,
as the schools are closed from Monday 24th March to all but the vulnerable children and children of key workers.
Remind employees of their rights to do so.
- Provide this official information to managers:
on how to deal with an employee who attends work displaying symptoms, or who has potentially been exposed to the virus.
CIPD has published comprehensive, daily-updated resources and guidance for employers, managers on responding to coronavirus: CIPD
Acas has useful guidance for employers and employees: Acas.
The Government and NHS websites for information and official advice are listed below.
- Employers must now implement home working wherever possible, depending upon business type and IT systems.
In normal circumstances, anyone working from home should receive an assessment of their domestic workplace. Clearly, this will not be possible at present, but some rights can be made clear, for example:
– working hours can still be clearly defined, and
– staff should receive their normal pay.
Employers are still responsible for employees’ Health and Safety and welfare when they are working at home
- Communicate with workers your policy on:
– home working,
– work travel, and
– precautionary isolation.
- Consider what pay your employees will receive if they work part-time, to fit around caring for children/elderly relatives.
Be as agile and flexible as you are able to ensure as many employees as possible to continue working.
- Conduct internal and client meetings where appropriate using virtual meetings/video conferencing/live streaming.
Keep up to date
- Refer employees who are concerned about infection to the official medical sources and advice below, and encourage them to keep themselves informed and updated as time goes on.
NHS Coronavirus COVID-19 : how to protect yourself or check if you need medical help on the NHS website.
UK Government televised briefings take place between 4pm and 6pm (weekdays) from Monday 16th March onwards.
Watch live on BBC News 24 & ITV News website.
Planning for future disruption
- Identify business critical roles and how they can be maintained.
- Identify any high-risk employees, such as pregnant women and those over 70, who will be working from home and consider whether there are any potential adjustments needed for them.
Where travel is absolutely necessary:
– consider what protective measures should be put in place,
– ensure that protective equipment is sourced and ordered
– check the FCO advice for the country in question.
- Identify the minimum safe level of workers required to continue operating, and how that can be maintained in the worst-case scenario. Identify the point at which the business may need to cease operating temporarily and speak to us about the employment law consequences.
At what point should an employer close the workplace?
- The Acas guidance advises that if someone with COVID-19 comes into a workplace, the workplace does not necessarily have to close.
- In England, the local Public Health England health protection team (HPT) will get in contact with the employer to:
– discuss the case
– identify people who have been in contact with the affected person.
– carry out a risk assessment
– advise on any actions or precautions to take.
- A risk assessment of each setting will be undertaken by the HPT with the employer. Advice on the management of staff and members of the public will be based on this assessment.
- The HPT will also be in contact with the case directly to advise on isolation and identifying other contacts and will be in touch with any contacts of the case to provide them with appropriate advice.
- Advice on cleaning of communal areas such as offices or toilets will also be given by the HPT.
Review the plan each week and communicate regularly to staff
We will be here to advise you during this situation and to help you plan for the future when the situation has stabilised and returns to more normal circumstances.
As leaders in times of uncertainty, we understand that there’s a lot on your shoulders, much to do and the stakes feel high.
Look after yourself through this time, you know best how; and allow those who support you to support you. Keep in touch.