Since March, we have kept employers up to date via this blog, with the announcements from the Government as and when they happen. There has been a lot of information shared!
To help you find the information you need we have created the following pages on the key topics:
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The information provided below is based on NHS 111 and government guidance as at the time of writing (12th May 2020). It is anticipated that further guidance and possible amendments to employment legislation may be forthcoming over the next days and weeks. We will update our advice and guidance on our website daily and whenever new information is announced.
Online Service for Furlough Grant Applications is Open and the Scheme Extended to 31 October 2020.
The Chancellor has announced that the Job Retention Scheme has been extended to 31 October 2020, with new flexible arrangements to be introduced from 1 August. Further details to be announced shortly.
The online service for applications to HMRC is now open CLICK HERE to claim.
The system is reported to be able to handle 450,000 claims per hour and employers should receive the grant money within 6 working days of submission.
HMRC has stated that employers will need to have enrolled for PAYE online which can take up to 10 days. CLICK HERE for more information.
To make the online application employers will need:
their employer PAYE reference number
the number of employees being furloughed
National Insurance Numbers for the employees furloughed
Names of the employees furloughed
Payroll/works number for the employees on furlough
their Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
the claim period (start and end date)
amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
bank account number and sort code
CLICK HERE for detailed HMRC guidance on calculating the maximum wage amount you can claim for.
Employers will need to calculate the amount they are claiming. From 20th April a calculator will be available on the GOV website to assist.
Please note HMRC has stated it will retain the right to retrospectively audit all aspects of claims.
HMRC has put in place an online portal for employees and the public to report suspected fraud in the Coronavirus Job Retention Scheme.
If you have fewer than 100 furloughed staff
You will be asked to enter details of each employee you are claiming for directly into the system - this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).
If you have 100 or more furloughed staff
You will be asked to upload a file with the information rather than input it directly into the system. HMRC will accept the following file types: .xls .xlsx .csv .ods
The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional).
You should retain all records and calculations in respect of your claims.
If the employer uses an agent who is authorised to act for them for PAYE purposes, the agent will be able to make a claim on the employers behalf. If they use a file only agent (who files the RTI return but doesn’t act for them on any other matters) the agent won’t be authorised to make a claim and the employer will need to do so. The file only agent can assist in obtaining the information to claim (which is listed above).
You should make your claim using the amounts in your payroll - either shortly before or during running payroll. Claims can be backdated until the 1 March where employees have already been furloughed.
Staff employed on or before 19th March 2020 now eligible to be furloughed.
The government has announced that to ensure the job retention scheme helps as many people as possible, the eligibility date has been extended to March 19 2020– the day before the scheme was announced, and it has also been extended to the end of June.
Employers can now claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020. This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020.
Can I furlough my apprentice and how does this affect their training?
Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed.
You must pay your Apprentices at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training. This means you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage.
Guidance is available for changes in apprenticeship learning arrangements because of COVID-19.
Are casual workers covered by the Job Retention Scheme?
The Government has listed eligible individuals who are not employees
The government has announced that as well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE:
office holders (including company directors)
salaried members of Limited Liability Partnerships (LLPs)
agency workers (including those employed by umbrella companies)
limb (b) workers. It is possible that casual workers (i.e. not working under a contract of employment nor self-employed) may be covered - see below:
Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.
As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.
Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
This also applies to salaried individuals who are directors of their own personal service company (PSC).
Salaried Members of Limited Liability Partnerships (LLPs)
Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme.
The rights and duties of a member of an LLP are set out in an LLP agreement and in the absence of an agreement, default provisions in the LLP Act 2000, based upon company and partnership law. Such an agreement may include separate agreement between the LLP and an individual member setting out the terms applicable to that member’s relationship with the LLP.
To furlough a member, the terms of the LLP agreement (or any such agreement between the LLP and the member) may need to be varied by a formal decision of the LLP, for example to reflect the fact that the member will perform no work in the LLP for the period of furlough, and the effect of this on their remuneration from the LLP. For an LLP member who is treated as being employed by the LLP (in accordance with s863A of ITTOIA 2005), the reference salary for this scheme is the LLP member’s profit allocation, excluding any amounts which are determined by the LLP member’s performance, or the overall performance of the LLP.
Agency Workers (including those employed by umbrella companies)
Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies.
Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.
Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.
Limb (b) Workers
Where Limb (b) Workers are paid through PAYE, they can be furloughed and receive support through this scheme. A limb b worker is defined in the Employment Rights Act 1996 as a worker who works under any other contract (other than an employment contract): "..whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;"
A Limb b worker is, therefore and individual who:
works under a contract personally to do work; and
the work is done for another party to the contract that is not a customer or client of a profession or business undertaking carried on by the individual
A person is occasionally offered work as a private nurse for various clients of a private nursing company. They have a worker contract that sets out terms of pay etc. and they are free to decline the work offered if they choose. When they do accept they must personally undertake the work and are paid by the company for the nursing service they provide to the company's patients.
Those who pay tax on their trading profits through Income Tax Self-Assessment, may instead be eligible for the Self-Employed Income Support Scheme (SEISS), announced by the Chancellor on 26 March 2020.
Read more information on the Self-Employed Income Support Scheme, including eligibility criteria and how to claim.
Can I furlough an employee who is shielding?
You can claim for furloughed employees who are shielding in line with public health guidance(or need to stay home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.
Can my workers' holiday entitlement be carried over to next year?
Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years.
New regulations were introduced on 27 March to allow up to 4 weeks of unused leave to be carried into the next 2 leave years, easing the requirements on business to ensure that workers take statutory amount of annual leave in any one year. The changes will also ensure all employers affected by COVID-19 have the flexibility to allow workers to carry over leave at a time when granting annual leave could leave them short-staffed in some of Britain’s key industries, such as food and healthcare.
The Working Time (Coronavirus) (Amendment) Regulations 2020 amends the Working Time Regulations 1998 to create a further exemption relating specifically to COVID-19. Where it is not reasonably practicable for a worker to take some, or all, of the holiday to which they are entitled due to the coronavirus, they have a right to carry the 4 weeks under regulation 13 into the next 2 leave years. This will not apply to the 1.6 weeks under regulation 13A leave, but this can be carried forward one year by agreement between workers and employers.
Can furloughed staff take holiday while on furlough?
Furloughed employees continue to accrue leave as per their employment contract. The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.
Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations.
Employers will be obliged to pay additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period.
If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu.
HMRC is keeping the policy on holiday pay during furlough under review.
What is the latest information on the Coronavirus Job Retention Scheme?
If you would like help to deal with your employees correctly please CLICK HERE for details of our special HR support package
The government has released further details concerning the Coronavirus Job Retention Scheme (CJRS).
Summary of the Scheme
To access the scheme you will need to:
Designate the relevant employees as "furloughed workers" and notify them of this change. This is instead of laying them off or making them redundant. The employer must keep a copy of the written communication informing employees they are furloughed for 5 years
The furloughed workers must not undertake any work at all for the employer
Submit information about the employees that have been furloughed to HMRC via a new online portal that is being set up - further details to follow
HMRC will reimburse 80% of the furloughed workers' wages cost up to a cap of £2,500 per month per employee. This will be back-dated to 1st March 2020. The online process for grant applications is available from 20th April 2020.
Employers who are suffering cash shortages in the meantime as a result of Coronavirus may be eligible for a Coronavirus Business Interruption Loan
Summary of further information concerning furloughed employees
Employer and employee must both agree to the furlough
Employee must have been on the payroll on 19 March 2020
All types of employment contracts are covered including zero hours and temporary ones
Employees on sick leave or self-isolating may be furloughed at the end of those periods
The grant will apply from the day the employee was furloughed which can be backdated to 1 March 2020
Employees made redundant after 28 February can be re-employed and placed on furlough instead
Employees on maternity /adoption/paternity/shared parental leave - normal rules still apply
Pregnant employees due to commence maternity leave will continue to do so as usual
Calculating Monthly Earnings
Full or part time employees on a salary
Claim for the 80% of the employee’s salary, as of 19 March 2020, before tax.
Employees whose pay varies
If the employee has been employed for 12 months or more, you can claim the highest of either the:
same month’s earning from the previous year
average monthly earnings for the 2019-2020 tax year
If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.
If the employee only started in February 2020, work out a pro-rata for their earnings so far, and claim for 80%.
Past Overtime, Fees, Commission, Bonuses and non-cash payments
You can claim for 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 commission payments and non-cash payments should be excluded.
Employer National Insurance and Pension Contributions
You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.
You cannot claim for:
additional National Insurance or pension contributions you make because you chose to top up your employee’s salary
any pension contributions you make that are above the mandatory employer contribution
Benefits in Kind and Salary Sacrifice Schemes
The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. Where the employer provides benefits to furloughed employees, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.
Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.
While Employees are Furloughed
Once on furlough employees are not able to work for their employer, but can undertake training or volunteer subject to public health guidance, as long as they're not:
making money for their employer
providing services to their employer
If employees are required to, for example, complete training courses whilst they are furloughed, then they must be paid at least the National Living Wage /National Minimum Wage for the time spent training, even if this is more than the 80% of their wage that will be subsidised.
Any activities undertaken while on furlough must be in line with the latest Public Health guidance during the COVID-19 outbreak.
The employee can still be made redundant while on furlough or afterwards.
Minimum furlough periods
Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.
The scheme will be open for at least 4 months to end of June 2020.
CLICK HERE for more details
What help is there for the self-employed?
A new Income Support Scheme was announced by the Chancellor today to provide financial support for the self-employed during the Coronavirus outbreak.
Cash grant paid direct to individuals' bank accounts worth 80% of average monthly trading profit over the last three years, up to £2500 per month
Eligibility: open to those already in self employment with a trading profit of less than £50,000 during the financial year 2018/19 OR an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19
More than half of income in the above periods must come from self-employment
The scheme will be for 3 months from March to June with grants paid in a single lump sum starting at the beginning of June. The scheme may be extended if necessary
Individuals should not contact HMRC now - eligibility will be checked automatically by HMRC and applications will be invited once the scheme is up and running
CLICK HERE for the Chancellor's statement and details.
What is the extension for filing statutory accounts that has been announced?
From 25 March 2020, businesses will be able to apply for a 3-month extension for filing their accounts.
This joint initiative between the government and Companies House will mean businesses can prioritise managing the impact of Coronavirus. As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete. Details to follow.
The government is also in close consultation with company representative bodies, legal practitioners and others, to look at solutions for the impact COVID-19 may have on companies’ ability to hold Annual General Meetings. Updated guidance on this matter will be published in due course.
We are a Charity, what updates are there we should be aware of that affect us?
Understandably, charities are concerned about what to do during the Coronavirus (COVID-19) outbreak and the government has set out responses to the most commonly asked questions including support for paying charity staff, and use of restricted funds and reserves.
CLICK HERE to visit the government Q&A covering these and other matters.
What do I do about Company Car MOTs that are due?
Vehicle owners are being granted a 6-month exemption from MOT testing, enabling them to continue to travel to work where this absolutely cannot be done from home, or shop for necessities. All cars, vans and motorcycles which usually would require an MOT test will be exempted from needing a test from 30 March 2020. Vehicles must be kept in a roadworthy condition, and garages will remain open for essential repair work. Drivers can still be prosecuted if driving unsafe vehicles and please note that employers' health & safety obligations and duty of care to their employees still need to be observed.
Has Gender Pay Gap Reporting been suspended?
Enforcement of the gender pay gap reporting deadlines has been suspended for this year.
The government announced today that, "due to the Coronavirus outbreak, the Government Equalities Office (GEO) and the Equality and Human Rights Commission (EHRC) have today, 24th March, taken the decision to suspend enforcement of the gender pay gap deadlines for this reporting year (2019/20)."
In a joint statement, Minister for Women & Equalities, Liz Truss, and EHRC Chair, David Isaac, said: “We recognise that employers across the country are facing unprecedented uncertainty and pressure at this time. Because of this we feel it is only right to suspend enforcement of gender pay gap reporting this year.”
In normal circumstances, the EHRC has the power to investigate employers that fail to report their gender pay gap data and could face an unlimited fine after court action.
More than 3000 employers have already reported their data via the gov.uk website this year (26% of expected reporters) and GEO will continue to provide support to employers in reporting their data should they wish to do so.
If you have more than 250 employees, and so are required to report your gender pay gap but have not already done so, you will not have to do so this year.
What are the new measures announced to stop the virus spreading?
The government has tonight announced new restrictions on movement with immediate effect. CLICK HERE to see the PM's full address to the nation on the BBC.
People must stay at home except to leave for a small number of reasons:
to purchase essential food, supplies/medicines
to undertake one form of exercise per day (e.g. a walk, cycle ride or run)
to go to work if absolutely essential and you cannot work at home : Contact us for advice and support on setting up your staff as homeworkers.
All shops other than essential food shops and pharmacies will be closed. Public gathering places such as libraries, restaurants, cafes, churches, leisure centres etc. will be closed. Hospitals and GP surgeries will remain open.
Gatherings of more than 2 people are not allowed, unless family members.
Ceremonies such as weddings are cancelled, the only exception being funerals which may be attended by close family members only
All non-essential travel must not go ahead.
The police will be given powers to enforce the new rules.
What is the current advice about self-isolating and sick pay?
The law has temporarily been amended to allow employees who are required to self-isolate, in accordance with NHS 111 guidelines, to be paid statutory sick pay (SSP) from the first day of absence (so the 3 waiting days no longer apply in this situation).
This only applies to absence related to Coronavirus and if the employee is, in any event, eligible to receive SSP. Employees can self-certify up to 7 days and thereafter we are advised they will be able to obtain an Isolation Note from the NHS 111 web service rather than going to see their GP for a medical certificate.
The government has said it will reimburse employers with fewer than 250 employees for SSP paid as a result of Coronavirus-related absence.
When should an employee stay at home?
The latest advice from NHS is to stay at home if you have either:
a high temperature – this means you feel hot to touch on your chest or back (you do not need to measure your temperature)
a new, continuous cough – this means coughing a lot for more than an hour, or 3 or more coughing episodes in 24 hours (if you usually have a cough, it may be worse than usual)
If an employee is not carrying the COVID-19 virus but needs to look after a family member who does, will they get sick pay?
The Government has announced new measures that mean these employees are entitled to Statutory Sick Pay (SSP) from day one. This includes people caring for those in the same household who display COVID-19 symptoms and have been told to self-isolate.
My employee’s child’s school is closing and they have to stay home to look after them. What are my options?
The government announced on 18 March that all schools will close. Those parents who are in Vital Roles such as NHS, emergency services, etc. will be able to send their children to school. CLICK HERE for a list of vital roles
Some options, if your staff cannot come to work for this reason are:
Identify if homeworking is an option and if so temporarily implement (see section below on homeworking)
See if the employee has any unused accrued holiday they may wish to take
Provide the employee with unpaid Dependant/Parental Leave – there is a legal entitlement for parents of children, up to the age of 18, to take up to 4 weeks of unpaid parental leave per child in any one year. Please contact us for more information.
Can I lay my staff off if I need to reduce costs quickly?
The government has introduced a new Coronavirus Job Retention Scheme (see above) to help employers try and avoid this. However, if still absolutely necessary due to cash shortages that cannot be temporarily resolved then this is still an option. There is other support available for businesses with cash flow problems due to the business interruption - for full details, eligibility and how to access these please CLICK HERE
If you have a lay-off and/or short-time working clause in your employees’ contracts of employment then these can be invoked with immediate effect. There is no requirement to provide notice.
Lay-off is where you inform staff there is no work available and they should not attend work. The clause should refer to the employees’ entitlement to pay ceasing on workless days. Instead employees may be entitled to a statutory guaranteed payment (currently £29 per day) for the first 5 days of lay off. There is no time limit to the length of lay-off, however after 4 consecutive weeks’ of lay off, or a total of 6 weeks of lay off in a 13 week period, an employee is entitled to treat themselves as redundant and claim a redundancy payment if they have been employed for at least two years.
If you have no lay-off clause staff may still be told not to come into work but the obligation to pay them their contractual pay continues.
Short-time working means you can reduce employees’ hours and pay accordingly.
How do I make staff redundant if I have to?
It is a requirement in law to follow a fair process to terminate employment because of redundancy. What is required will depend on the specific circumstances of your staff including criteria such as length of service, jobs, number of employees affected, and particularly the circumstances you are facing. Please contact us to discuss further if needed.
Can I ask my employees to take a pay-cut or work for no pay?
Any changes to fundamental terms and conditions of employment, such as reducing pay, has to be by mutual agreement. It is acceptable to ask employees if they would be willing to take a reduction in pay to help the business through a difficult period. If this is something you want to consider doing please contact us for guidance.
Should I be making my staff homeworkers if I can?
The government’s advice is that people should work from home if they can, to reduce social interaction. If you decide this is practical in your situation then this can be temporarily introduced – our advice is to carefully think through the implications including:
Have a clear homeworking policy in place – contact us for this
Homeworkers need to complete a risk assessment – contact us for a template
Consider IT arrangements – our sister company HJS Technology can assist with all requirements
Make suitable supervisory and contact arrangements to maintain work motivation and productivity
How HJS Human Resources can support you
If you have to deal with reducing staff costs quickly and need urgent support and advice please contact us:
Call 01722 325833 or email firstname.lastname@example.org, or
Contact Dan Jenkins (MD) directly at email@example.com or 07584 473128
To assist businesses in coping with this urgent situation we have developed a special support package that includes:
Up to 2 hours of telephone/email advice on dealing with staffing matters arising out of the Coronavirus crisis
Review of employment contracts to establish options available
Employee letters relating to the Coronavirus situation
Homeworker risk assessment