Welcome all to the May edition of the AdviserPlus newsletter.
Coronavirus continues to be the key topic of discussion and consideration for HR professionals and today we will look at two key areas, supporting keyworkers if your business is open and reducing your workforce if your business is remaining closed following the government announcement on 16 April or your operation has been affected by Coronavirus.
Reducing your workforce
Following the government’s announcement on 16 April that lock down measures will continue and be reviewed again in three weeks, there is a strong likelihood that many businesses may not be able to re-open for weeks or months. If you haven’t already, you may find yourself in a position where you have to temporarily or permanently reduce your workforce. Below we consider the options available to you, depending on your individual circumstances.
Coronavirus Job Retention Scheme
On 20 March the government announced the Coronavirus Job Retention Scheme. Under this scheme if you cannot maintain your current workforce because your operation has been severely impacted by Coronavirus, you can furlough your employees and claim up to 80% of their wages capped at £2,500 plus the associated Employer NIC contribution and minimum automatic enrolment employer pension contribution of 3% on qualifying earnings.
- The scheme is open to all UK employers that had created and started a PAYE payroll on or before 19 March
- You must have a UK bank account
- The minimum length of furlough is 3 consecutive weeks
- The scheme will run for 4 months from 1 March, this may be extended
- The scheme is UK-wide, so it also covers Wales, Scotland and Northern Ireland.
Employees that can be furloughed
- Employees must have been on your PAYE payroll on or before 19 March and notified to HMRC by an RTI submission on or before 19 March
- The scheme also covers employees that were employed on 28 February and on payroll but made redundant after that but prior to 19 March, if you re-employ them and put them on furlough
- Fixed term employees can be furloughed and can have their contracts renewed or extended whilst on furlough
- Employees shielding in line with public health guidelines can be furloughed if they cannot work from home
- Employees who are unable to work because of caring responsibilities, including childcare can be furloughed
- Employees on sick leave can be furloughed after their absence, or during their absence if you need to furlough them for business reasons
To place an employee on furlough you will either need to have a contractual provision allowing you to change their status or seek their agreement. The government guidance requires you to confirm the furlough in writing, including that the employee will not complete any work for you during furlough and to retain this written confirmation for 5 years.
How much you can claim
You can claim up to 80% of a furloughed employee’s wages capped at £2,500 plus the associated Employer NIC contribution and minimum automatic enrolment employer pension contribution of 3% on qualifying earnings. You may choose to top the employees pay up to 100% but you do not have to.
To calculate the amount to claim:
- For salaried employees use their last pay period prior to 19 March
- If an employee’s pay varies you can claim the higher amount of either the same months earnings last year, or their average monthly earnings for the 2019/2020 tax year.
You can also claim for regular payments you are obliged to pay your employees such as wages, past overtime and compulsory commission. You should exclude discretionary payments.
How to claim
You will need to submit information to HMRC using an online portal.
You will need to calculate the amount you are claiming. For guidance on this, including a calculator, visit the government website.
Annual and unpaid leave
If you require employees to take holidays during a period of closure, unless your contract states otherwise, you can tell them when to take holidays. You will need to provide twice the amount of notice as the length of the holiday.
If you need an employee to take unpaid leave, you will need them to agree to this.
Lay-off and short-time working
Lay-off refers to not providing work for a period of time and short-time working refers to a reduction in hours. To implement a lay-off or short time working, you either need to have an express clause in your contract or seek employee consent.
Employees who are laid off may be entitled to Statutory Guarantee Pay of £30 per day.
Be mindful that if your employee is likely to be laid off for four continuous weeks, or six weeks within a 13-week period, they may be entitled to statutory redundancy pay. To claim this an employee must resign with notice of their intention. You can offset a claim by guaranteeing employees 13 weeks consecutive work within four weeks of receiving their notice.
Unfortunately you may feel you have no choice but to permanently reduce the size of your workforce. If you need to make people redundant due to the impact of Coronavirus, the normal redundancy provisions apply meaning:
- You are required to take steps to avoid compulsory redundancies, for example seeking volunteers, banning overtime or freezing recruitment. This could also include using the government Coronavirus Job Retention Scheme
- You must follow a correct and fair procedure including your own procedure if you have one
- The usual redundancy process will apply including selection, seeking volunteers, consultation and paying the correct statutory redundancy pay
Keyworkers are employees who work for one of the following critical sectors:
- Health and social care
- Education and childcare
- Key public services
- Local and national government
- Food and other necessary goods
- Public safety and national security
- Utilities, communication and financial services.
Protecting employees from physical risk
It is important that you identify and minimise any physical risk of Coronavirus to your employees. The following measures outline a good starting point for identifying and minimising risk:
- Allowing people to work from home if possible or minimising who needs to be in the office for example using a rota system
- Ensuring adherence to the 2-metre distance rule where possible
- Ensuring employees are aware of the correct hygiene procedures and adequate handwashing facilities are in place
- Cancelling face-to-face meetings and holding remotely if possible
- Allowing people to commute at quieter times if possible
- Tailoring public health guidance to specific roles and scenarios
- Working with occupational health, health and safety teams and referring to official government, public health and sector/trade/professional body guidance
- Communicating safety measures and practical steps clearly to all employees and managers
- Ensuring employees know what to do if they have symptoms or someone in their house has symptoms
- Providing appropriate PPE where required.
Supporting mental health
The Coronavirus pandemic increases the risk of employees suffering from mental ill health for a number of reasons, such as:
- Concerns over exposure to Coronavirus
- New work or increased work demands
- Pace and scale of pressure on individuals and their resilience
- Personal loss.
In order to identify and support employees it is recommended that you:
- Take proactive steps to manage your employee’s mental health
- Identify individuals who may be more vulnerable due to their personal circumstances or medical history
- Look for prompts in employee’s behaviour to identify anyone who may be suffering
- Acknowledge that the impact on individuals is variable and tailor your approach accordingly
- Ensure appropriate support pathways are in place and encourage self-care
- Support line managers so they can support their teams and signpost where needed
- Acknowledge, support and celebrate individuals or teams who are being impacted by increased work pressures
- Consider the use of climate surveys example to temperature check the work force.
Testing of essential workers
In the government briefing on 23 April, Health Secretary Matt Hancock announced testing for the following:
- Essential workers with symptoms
- People who live with essential workers who have symptoms.
Testing will allow symptomatic essential workers and their household members to know whether or not they have the virus, which in turn will keep essential services running.
To arrange a test, employees can either self-refer or you can make a referral on their behalf.
For further information including who can be tested and how to arrange a test, refer to the government site.
Note: The above guidance was correct at the time of writing this article on 29 April however, you need to be fluid in your approach to coronavirus as the policy and government guidance is changing rapidly. We therefore recommend you regularly check the government official guidance on the gov.uk website and news for updates or contact us if you have any specific questions.
If you have any questions regarding the content of this newsletter, or would like more information to support your business with the changes, please get in touch.