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In this inaugural April column, Croner-i answer some essential employment questions around the impact of the coronavirus COVID-19 pandemic on your business. Please note, this is a fast-moving situation and the answers are correct at time of writing.
Should I pay staff who self-isolate?
From 16 March, anyone who is under the Government’s advice to self-isolate will be entitled to receive statutory sick pay (SSP), even if they do not have the virus or have any symptoms, provided they meet the other normal SSP eligibility criteria.
Statutory sick pay (SSP) is usually paid from the fourth day of absence. In the current crisis, employees and workers who self-isolate for health reasons will count as being off sick from day one. To be eligible for this SSP, the employee or worker must earn above the lower earnings limit of £120 per week.
What happens if an employee needs time off work to look after someone?
Employees may need time off to deal with an emergency caused by coronavirus COVID-19 ― for example, if they have children they need to look after or arrange childcare for because their school has closed; or to help their child or another dependant if they’re sick, or need to go into isolation or hospital.
Employees are entitled under the current legislation to time off work to help someone who depends on them in an unexpected event or emergency. This would apply to situations relating to coronavirus COVID-19.
There’s no statutory right to pay for this time off, but some employers might offer pay depending on the contract or workplace policy. Furthermore, the amount of time off an employee takes to look after someone must be reasonable for the situation.
For example, they might take two days off to start with and, if more time is needed, they can book holiday. What counts as reasonable depends on the circumstances, but coronavirus COVID-19 is a very new challenge.
What is the Job Retention Scheme and how does it avoid laying staff off?
The Job Retention Scheme recently announced by the government involves employers placing their employees on furlough, which essentially means putting employees on temporary leave of absence where they do not work and do not receive pay, but are retained on your books to be brought back in when you need them.
Employers who do this will be able to obtain a grant from the Government to cover 80% of furloughed employees’ wages, to a maximum of £2,500 per employee per month. All employers can access it; there is no restriction on size or type.
Guidance sets out that you will need to designate which of your workforce will be furloughed employees and then submit that information to HMRC, along with each employee’s earnings. You will then receive a grant to cover the 80% wages.
The Chancellor has stated he hopes the first grants will be paid by the end of April 2020, and they will be backdated to 1 March 2020. The scheme is initially intended to run for three months but it may be extended.
An employee needs to be on PAYE in order for you to be able to claim the grant for their wages. Guidance states that your ability to furlough an employee depends on their contract. It is not likely that employee contracts will include a specific right to use furlough. However, contracts which contain a right to lay off employees on no pay already give you the right to send employees home and not pay them for a temporary period and so can likely be used to furlough employees.
The difference is that employees on lay off will receive, subject to service criteria, statutory guarantee pay (SGP) whereas furloughed employees will receive 80% of their wages. SGP is £29 per day for a maximum of 5 days in a rolling 13-week period, so furlough offers the employee a much more favourable option in terms of pay.
If contracts do not contain a right to unpaid lay off, you can ask the employee to agree to furlough. Although 80% of wages may not be an initially attractive option next to full pay, it is likely to be more attractive than redundancy, which may be the end result if alternative options cannot be found. It may also be useful for employees who are struggling to find childcare.
If you have already taken the step to utilise lay off, you can get in touch with those employees and agree to change their current status from lay off to furlough. This would simply involve changing their pay arrangements from nothing (if not entitled to SGP), or SGP to 80% wages, as they are already not working.
If you are not placing everyone on furlough, you should consider carefully who it should be. Think about whose skills will continue to be in demand through this difficult period. Whilst you may assume that the best thing to do is furlough those employees labelled as high risk by the Government, forcing them on to furlough without their input, and therefore forcing them on to 80% wages, may result in discrimination claims from those who allege they were made to do it because of their age, disability or pregnancy.
It may be best to ask for volunteers across the workforce and if any high risk employees, who had previously been risk assessed as fine to still be in work, put themselves forward, it may well be appropriate to choose them first.
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