There was a point in time where life was normal, and then news of the coronavirus started to spread, and life became surreal.
Due to the highly contagious nature of the virus, communities across the world have repeatedly been instructed to stay at home and keep their distance. This has had a resounding effect on the way people live and work. Some individuals are lucky enough to continue to remain in good health and can work from home, so they are relatively unaffected by the spread of the disease from a work perspective.
Let’s take a look at the U.K. government’s support in response to the COVID-19 pandemic.
Statutory Sick Pay
Prime Minister Boris Johnson announced on 4 March that for any individual who was absent from work due to coronavirus, Statutory Sick Pay (SSP) would be temporarily payable from day one of the sickness as opposed to day four. This was in a bid to encourage people to stay at home if affected by the disease to help stop further spread of it.
These amendments to SSP rules are only applicable to coronavirus-related absences so, if, for example, an employee fell and fractured their hand, the normal rules of SSP still apply in relation to its payment.
This would apply for anyone diagnosed with COVID-19, anyone who has been advised to self- isolate, or any individuals who are following government guidance to self-isolate.
Regulations were laid that came into force from 13 March to allow SSP to be payable from day one of absence for coronavirus and self-isolation. Any absences prior to this point would need to observe the normal rules.
The U.K. Government has strongly advised some employees—such as the elderly, those with a serious underlying medical condition, and pregnant women—to follow strict social distancing measures to protect themselves from coronavirus. These individuals have been advised to ”shield” for approximately 12 weeks. Shielding differs from self-isolating, and the changes to SSP do not apply to these scenarios.
Employees are not required to provide medical evidence for the first seven days of absence in order to receive SSP. After this point, an employer can request sight (proof) of medical evidence. Ordinarily, the evidence would be a fit note from a general practitioner or another doctor.
NHS 111 has launched a new online service that allows people to get an isolation note. This note will provide sufficient evidence that they are self-isolating due to coronavirus and can be used in place of the fit note. Employers have been advised to take a flexible approach to evidence relating to sickness in the current circumstances.
To support businesses, the U.K. Government announced at Budget 2020 that reimbursement for SSP (paid due to coronavirus) will be available to employers that have fewer than 250 employees as of 28 February.
The refund will cover up to 14 days of SSP per each eligible employee absent due to COVID-19. There is no requirement for employers to retain medical evidence, but they must keep records (for up to three years) that include the following:
- Reason why an employee could not work
- Details of each period an employee could not work, including start and end dates
- Details of the SSP qualifying days when an employee could not work
- National Insurance numbers of all employees who have been paid SSP
Coronavirus Job Retention Scheme
Coronavirus Job Retention Scheme (CJRS) will see a substantial amount of financial support being given to employers to support employment during the COVID-19 outbreak and, to quote the Chancellor of the Exchequer, who announced this measure, “We will stand by you, and we hope you will stand by your employees.”
The word furlough was not, until this announcement, used commonly or widely within modern U.K. employment practice. In this context, it is used to describe the temporary layoff of an employee, for a minimum period of three weeks, after which they can return to work. If needed, they may be furloughed again.
The aim is to prevent redundancy situations arising, where possible, and aspires to support employers and employees through a short-term period of economic turbulence.
The amount that employers can recover from the government, in the form of a grant payment, is 80% of employee salary to a maximum of £2,500 per month, plus the cost of the employer National Insurance Contributions (NIC) and minimum automatic enrolment employer contributions on top of the furloughed amount.
At the time of the announcement, the CRJS repayment process was due to be delivered by Her Majesty’s Revenue and Customs (HMRC) by the end of April, at which time furlough amounts can be reclaimed, backdated to 1 March. The scheme was expected to run for a period of three months but could be extended if needed.
All U.K. employers, with a U.K. bank account, will be eligible to the scheme on the proviso that it operated a PAYE scheme on or before 28 February. The scheme is open to public, private, and third-sector employers.
In order to claim the grant, the employer must place the employee on furlough, and the employee must have been employed on 28 February in order to be furloughed. If they were employed after that point, they cannot be furloughed.
Employers must discuss the fact that they are furloughing an employee with the affected individual as it is a change to their contract of employment. They will be required to provide a letter to their affected employees. The business should retain records of the correspondence.
As employees aren’t working when on furlough, National Minimum Wage (NMW) legislation does not apply, but if they do complete any training during the period, then this must be paid at least at the relevant rate of National Living Wage/National Minimum Wage rate.
Employees on sick leave and in receipt of SSP cannot be furloughed until they are fit enough to return to work. Employees who are shielding, however, can be furloughed.
Employees cannot be furloughed during the period of compulsory maternity leave, which is two weeks, or four weeks for women who work in a factory. If employers pay more than the statutory levels during maternity, adoption, paternity, or shared parental leave, the additional figures can be claimed through the scheme (applying the 80% up to a maximum of £2,500).
Other Support Measures
In addition to CJRS, the U.K. has launched an unprecedented but almost equal package of measures to support the self-employed. Many other actions are being taken to provide employers and employees with support, amongst which include the following:
- Off-payroll working reforms—due to come into effect in the private sector from 6 April have been postponed for a period of 12 months; instead they will be introduced from 2021. This news was welcome but came as a surprise, as from the content of the Budget held just two weeks earlier, payroll professionals believed that nothing would stop this juggernaut from going ahead as planned from 6 April.
- Gender pay gap (GPG) reports—required from employers by 30 March in the public sector, and 4 April in the private sector, were removed. This was in recognition of the fact that the departments responsible for compiling this information were already under extreme additional pressure due to the outbreak of coronavirus. Employers that still wish to provide that information are encouraged to do so, but the submission of data is no longer mandatory for 2019.
- Right to Work (RTW) checks—benefit from a temporary relaxation to the process for checking RTW documentation. Original documents will not be required for a temporary period, and scanned copies can be accepted, under the condition that a full standard RTW check would be processed retrospectively once the temporary changes are removed. This announcement from the Home Office (a ministerial department of Her Majesty’s Government responsible for immigration, security, and law and order) was indeed welcome.
- The right to carry forward four weeks of leave for up to two years—where the leave has been prevented by reason of coronavirus, was welcome news from the U.K.’s Department for Business, Energy and Industrial Strategy (BEIS).
BEIS confirmed that any employee who is prevented from taking some, or all, of the holiday to which they are entitled, will be granted a right to carry the statutory period of four weeks over to the next two leave years. This is applicable to the period of four weeks of annual leave only, and not the full statutory 5.6-week holiday entitlement observed in the U.K.
- The EU Settlement Scheme (yes, the subject of Brexit hasn’t gone away)—which allows EU nationals living in the U.K. to apply for pre-settled or settled status, is still running and applications are still being processed. However, the application times are significantly longer, and the routes by which individuals can apply have been temporarily changed.
On a Final Note
The package of U.K. Government support is unprecedented, but then we are currently living through a period of turbulence that is also unparalleled in modern times. Already, we can see the impact of these temporary measures having a significant long-term impact of working practices as well as on our tax system.
The news that the self-employed would receive a similar support package to that given for employees provided an opportunity for the Chancellor to raise the subject of equalisation of taxes between employees and the self-employed.
Ever the political hot potato, I have to muse, was this a statement of future policy or just a shot across the bow?
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Samantha Mann, MAAT, MCIPPDip, is Policy and Research Technical Lead for the Chartered Institute of Payroll Professionals (CIPP) in the U.K.