YOUR ONE STOP SHOP FOR UP TO DATE ANSWERS ON COVID 19
Covid 19 has raised lots of questions for employers. Here are answers to key questions - kept updated daily as the government guidance is changing so quickly.
I have done my best to anticipate your questions and give useful guidance (I made the assumption you are a SME and your workforce is working from home if at all). This is not a substitute for legal advice and shoul dnot be relied upon as legal advice. Do ask it you're not sure what to do. If you have other questions you want to see answered here, get in touch and I will update.
I can't afford to pay my employees anymore. Your options are basically to put employees on furlough / reduced pay / reduced time. You could look at redundancies but bearing in mind the furlough scheme put in place by government it may not be fair to make people redundant before the end of the furlough scheme unless you have good reasons. As the extended furlough scheme will require more employer contributions, this will be easier to justify if your business cannot support this cost and redundancies are the only option. For all these options, you will generally need consent from the employees (obviously not for redundancies). Write to them, explain what you are proposing and why and document their consent.
What is the furlough scheme? It is the promise of government to pay you (the employer) for 80% (up to £2500) of the basic wages of those employees you cannot keep paying because of Covid 19 until end of June 2020. From July, the system changes. Employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week. The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June. This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3 week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June. Find out more information on how the Coronavirus Job Retention Scheme is changing.
Exactly what do you get during furlough? As a minimum the government will cover 80% of basic wages up to £2500 pcm per employee. Note - guidance has changed - you can include in the basic wage any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and discretionary commission payments and non-cash payments should be excluded. For those with irregular earnings, there is a formula. The employee's pay will be subject to the normal deductions for tax / NI / pension contributions. Employers will be able to claim employer NI and employer pension contributions up to 3% up until end of July - then the employer will have to pay for employer NI and pension contributions. You as the employer can top this up so people are no worse off (and can still pay their mortgage etc). Employees continue to accrue annual leave (although you could agree in your furlough agreement to accrue just the statutory minimum during this time, i.e. 5.6 weeks) and that is to be paid at 100% of normal pay.
From August employers will have to pay national insurance and pension contributions, from September they will also have to pay 10% of wages claimed, and from October they will have to pay 20%.
Can anyone be furloughed? You can furlough all employees (including those on zero hour contracts) who were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020. You can also furlough those you may have dismissed since 28 February because of Covid 19 (even if that was not for a Covid 19 reason) - you have to rehire them and place them on furlough. This is not totally cost neutral because annual leave continues to accrue but means you can retain this workforce and really help them out during this time. From end of July there will also be additional contributions from the employers. You can only furlough those who now do zero work for you. If you need people to keep working even a little, they cannot be furloughed. Make sure you are not discriminating unlawfully when selecting who goes on furlough. Note there is a deadline now - the final date by which an employer can furlough an employee for the first time will be 10 June.
Can you rotate employees furloughed? Basically yes as long as you make sure they are on furlough for a minimum of 3 weeks.
What happens during furlough? They remain your employee but they cannot do any work for you (except from 1 July). They can do work for other employers. They can volunteer and you can make them do online training (time for that GDPR training? think of using my colleague's fun online training: https://www.privacycompliancehub.com/gdpr-training.php. I think it may still be ok to involve them in social stuff at work - the slack / whatsapp groups but you must derive no value from them. They cannot give services or generate revenue to the company. They must still abide by the same rules on conduct.
What about holidays during furlough? Holidays continue to accrue during furlough. They will have to be paid at full rate. They can take holiday during furlough. It is not entirely clear whether you can make them take holiday (usual rule would apply: give notice of twice the amount of holiday being taken) but most commentators think so. There is new legislation that provides that if you cannot take your holidays (up to a max of 4 weeks) because of covid 19 you can carry over up to 4 weeks leave for up to 2 years.
Do I have to do anything before I take any of these measures? Usually you will need the consent of employees to either furlough them, reduce their pay or reduce their working time. You need a written record of the agreement to furlough with your employee (and keep it on file for 5 years). If you are thinking of forcing a contractual change (i.e. if they don't agree you will do it anyway or dismiss them) on 20+ people in the space of 90 days you need to do what is called "collective consultation". This involves notifying the government of your plans, appointing reps, and consulting for a minimum period of time (usually 30 days before first "forced" change or redundancy takes effect). If you are in this situation, take advice to understand this better and possible risks or alternatives.
What if someone falls ill during furlough? Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay (SSP) entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments. Employees on furlough cannot claim SSP. As furlough money will usually be more than SSP, I see no reason why they cannot just remain on furlough. If they were ill or self isolating before the furlough however they have to wait until that has come to an end to be furloughed (the SSP rules were relaxed so you can claim back more SSP - see below).
What obligations do I have towards those still working now from home? All your normal obligations continue to apply as an employer. You need to keep them safe (including in terms of their mental health). If you someone cracking under the current pressure, do something as you still have a duty of care. The HSE has published a good page for H&S requirements whilst working from home: Bear in mind that it's not possible to do a full time job and look after small kids so do you need to adapt their workload to make it bearable? Can you do it on full pay or do you have to look at reduced working week on a temporary basis? Keep in mind those who have health conditions and your obligations towards disabled employees. Think about giving your workforce access to free counselling through an employee assistance program.
What else do I need to think about for those still working now from home? Don't forget your normal obligations as a business - data protection, confidentiality obligations towards 3rd parties and other conduct requirements. You may want to remind people of these. You may want to check your policies to make sure they are relevant (e.g. bring your own device policies, social media policies).
Any help for those falling ill? Check your contracts - normal rules on sick pay will apply. The government has provided that you can claim statutory sick pay from the first day if you're ill with the virus and you can't work, for up to 28 weeks. But SSP is only £94.25 per week. See note above about what happens in your fall ill during furlough (basically stay on furlough unless SSP is better for you).
What happens after furlough? Either it's back to work, or you can make someone redundant whilst on furlough or afterwards. Normal rules around fairness of redundancy will apply. If you are proposing 20 people + you need to build in collective consultation (electing representatives, notifying government, doing a minimum consultation period of 30 days).
Where is the detail of all this?
HMRC guidance for employers: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
HMRC guidance for employees: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
Guide to working out 80% of wages: https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme
If you have other questions you want to see answered here, get in touch so I can update.