COVID-19: FAQs for employers

Posted on 23 October 2020

This page was last updated on 23 October 2020

In this note, we set out the most frequently asked questions, with our answers, taking into account the latest Government advice. We intend to keep these FAQs updated in light of any new concerns raised by our clients and rapidly changing government guidance.

What are the rules about working during the pandemic?
Should employees be returning to work?

On 22 September, the Government announced new measures to suppress the spread of COVID-19. The new measures mean that office workers who can work effectively from home should do so "over the winter".

Government guidance states that an employee will be deemed able to work from home if their employer, in consultation with the employee, judges an employee can carry out their normal duties from home.

What about employees who cannot work effectively from home?

The Government has left it to employers and employees to determine whether an employee is able to work effectively or not from home. If an employee is not able to work effectively from home, then they may work in the office or relevant workplace. The Government has not set out what considerations should be taken into account when deciding whether an employee should work from home, but these factors could range from whether an employee's mental health is suffering whilst they are working from home, to whether there are practical difficulties preventing the employee from working effectively from home.

What about employees who cannot work at all from home?

If an employee cannot work at all from home, they should go to their place of work. If employees who cannot work from home are continuing to attend the workplace, employers should follow the industry specific COVID-19 Secure guidelines, which are further explored below.

What about businesses that are ordered to close due to local lockdowns or other Government instructions?

Employees must not attend their place of work if it has been ordered to close.  However, please see 'What if I am required by law to close my business?' for details of the expanded Job Support Scheme.

Does the rule of six apply at work?

Pursuant to The Health Protection (Coronavirus, Restrictions) (No. 2) (England) Regulations 2020, it is against the law to meet in a group of more than six, indoors or outdoors. However, the rule of six does not apply to gatherings which are reasonably necessary for work purposes.

The guidance also states that where a group includes someone who is working, they are not counted as part of the gatherings limit. For example, a tradesperson can go into a household of six without breaching the limit, if they are there for work.

Can I be fined if an employee comes to work when they are supposed to be self-isolating?

Employers can be fined up to £10,000 for forcing, or allowing, employees to attend a workplace whilst they are required to self-isolate. Directors can be personally liable for this fine.

Health and Safety

If employees cannot work, either effectively or at all, from home and are attending their workplace, employers must take reasonable steps to set up, and implement, a safe place and safe system of work so that it does not breach its statutory duties. Failing to do so could amount to a criminal offence and an unlimited fine (although Sentencing Council guidelines suggest this will not exceed £10 million, which would be reserved for the most serious breaches). Directors and officers can also be criminally liable for breaches of Health & Safety obligations.

These obligations apply in relation not just to an employer's employees, but also those not in their employment (such as members of the general public) who may be affected by their business.

Employers are also required to undertake a risk assessment of their business, which must be regularly updated to reflect any change in circumstances and to consult with their employees (see below).

What Government guidance is currently available to employers?

Whilst the current guidance states that employees should work from home if they can effectively do so, the Government has published sector specific guidance for employers aimed at assisting employers making appropriate changes to the workplace. The Government has also set out five practical steps for businesses preparing for staff to return to work including re-designing workspaces to maintain social distancing and enhancing cleaning processes. You can find the link to the guidance and the relevant guides here. Employers should download the notice included in the applicable guide to demonstrate that they have followed the guidance and they are taking reasonable steps to ensure a safe system of work.

However, it is important to remember that this guidance does not replace an employer's legal obligations. The Government has made it clear that the majority of the guidelines only hold the status of non-statutory guidance. Compliance with this guidance in itself will not therefore necessarily mean that an employer is complying with its full legal obligations in respect of Health & Safety – but a failure to comply with the guidance is likely to indicate that the employer is also failing in their statutory duties.

What should an employer consider when carrying out a COVID-19 risk assessment?

The Health and Safety Executive ("HSE") sets out guidance for carrying out a risk assessment here. Employers need to bear in mind what they can do to avoid employees risking infection, such as allowing people to continue to work from home where possible.

Where employees need to attend the workplace, employers should consider how they can best adapt their workplace to abide by social distancing measures and reduce the risk of a virus outbreak. The Government published workplace specific guidance on 11 May, and this was updated on 24 June to help businesses prepare their workplaces so that they can operate safely.

Employers must consult their workers or trade unions to establish what guidelines to put in place (see below). If possible, employers should publish the results of their risk assessments on their website and the Government has stated that it expects all businesses with over 50 employees to do so.

Do I need to consult with employees in relation to health and safety measures in the workplace?

Employers have a duty to consult their staff on health and safety. Employers must consult with the health and safety representative selected by a recognised trade union or, if there isn’t one, a representative chosen by workers - employers cannot decide who the representative will be. Alternatively, an employer can consult with the workforce as a whole if no trade union is recognised.

Employers must provide such information as may be necessary to enable employees or their representatives to participate fully and effectively in any consultation process.

If I have done a risk assessment, consulted with employees and issued guidance to employees, is that enough to satisfy my Health & Safety obligations?

No. Employers should remember the ongoing nature of their duties, and keep their procedures under review, making any changes where necessary.

Simply issuing guidance to employees is unlikely to amount to providing a safe system of work: the employer must also provide the resources necessary to carry it out.  For example, if an employer instructs employees to wash their hands regularly, it should also provide the appropriate amount of washbasins, soap and hand drying options throughout the workplace to enable employees to comply.

Employees must also be trained on any process or guidance which is introduced, to ensure that they are aware of what is required of them and the steps they need to take to protect themselves and others.

Can we require employees to submit to COVID-19 testing?

Employee consent will be required in order to administer any testing, including taking temperatures. To proceed without consent could amount to a repudiatory breach of contract and potentially assault if a temperature check is carried out against an individual's will.

Employers also need to give consideration to the personal data they are storing about their employees.

Practical health and safety changes an employer might have to make to the workplace

The following is a list of suggestions of steps an employer might consider taking, depending on the nature of the business and taking into account Government guidance.

Hygiene

  • Provide adequate volumes of hand sanitiser, and disinfectant wipes for computers and phones
  • Ensure strict cleaning rules are adhered to, and that deep cleans are carried out regularly
  • Consider providing personal protective equipment ("PPE") to employees
  • Do not allow 'hot desking'
  • Have a dedicated phoneline/email where employees can alert the employer if they are displaying symptoms of COVID-19, and which colleagues they have been in contact with recently
  • Consider how waste disposal will work, particularly in relation to PPE

Entering and exiting the workspace

  • Checks at the entrance to the workspace, such as taking employees' temperatures
  • Limit the number of people allowed in lifts and encourage use of stairs
  • Stagger start, lunch, and finish times to avoid overcrowding in the workspace
  • Ensuring physical distancing between employees in the workspace
  • In office spaces, ensure that desks are at least two metres apart. If this means reducing the number of desks available, consider rotating staff who work in the office (but note that hotdesking is not advisable). If certain members of staff can work effectively home, allow them to do so
  • In other workspaces, such as retail, limit the number of staff allowed in certain areas, such as at till kiosks or serving areas
  • Limit the number of people allowed in confined spaces, such as meeting rooms, and the time employees can spend in these places
  • Establish a one-way system of movement for employees where possible

Communal spaces and facilities

  • Strictly limit the number of people allowed in communal spaces, such as canteens and kitchens
  • Shut down other communal facilities, such as gyms
  • Prohibit the use of shared equipment, such as cutlery, crockery and stationery

Non-employees in the workspace

  • Limit clients entering the workspace to essential visits only, and hold meetings virtually if possible
  • In retail spaces, limit the number of customers allowed in to the workspace at one time
  • Have appropriate signage asking non-employees to respect social distancing measures
  • Encourage greetings other than handshakes
  • Provide appropriate PPE to non-employees
  • Consider installing screens at service points

How should an employer monitor the effectiveness of its measures?

  • Regular surveys allow employees to make suggestions on the adequacy of current measures, and suggest improvements going forward
  • Consult with representative bodies (staff consultative committees, recognised trade unions), where appropriate, before re-opening and on a regular basis after re-opening
  • Set up a dedicated email/telephone for employees to contact if measures need to be addressed urgently
  • Provide assurances that employees raising concerns will be free from reprisal, and publicise (and introduce, if necessary) a whistleblowing policy
  • Review policies and risk assessments on a regular basis

 

What aspects of employment law do I need to think about?
If an employee has had COVID-19, are they likely to be disabled under the Equality Act 2010?

Whilst medical evidence on COVID-19 is still developing, the virus itself is unlikely to constitute a disability.  However, the long-term effects of the virus on people who have suffered severe cases (i.e. those hospitalised and/or admitted to intensive care), or who suffer from the effects of 'long haul' COVID-19 may lead to long-term impairments amounting to a disability under the Equality Act 2010.

As a result, the employer should be careful to make reasonable adjustments for employees that have ongoing complications arising from COVID-19. Dialogue between the employer and employee should help identify what measures, if any, are appropriate for the individual employee's current condition (for example, a gradual/phased return to work). They should keep arrangements under review in case any problems arise in the future.

How should an employer support employees who are considered 'clinically extremely vulnerable'?

The Government outlines those classed as 'clinically extremely vulnerable' here, and employees falling in this category may well also be disabled under the Equality Act 2010. The Government has said that employees who are clinically extremely vulnerable can go to work as long as the workplace adheres to the COVID-19 Secure guidelines.

However, compelling a 'clinically extremely vulnerable' employee to come to the workplace could potentially lead to claims under both discrimination and/or health and safety law.

How should an employer support employees who are considered 'clinically vulnerable'?

'Clinically vulnerable' people are listed here. They are distinct from those considered 'clinically extremely vulnerable'.

However, a 'clinically vulnerable' employee may also be disabled under the Equality Act 2010. Consequently, employers should talk to an impacted employee, undertake risk assessments and (if needed) obtain relevant medical evidence to identify reasonable adjustments that can help an employee safely return to work. The Government has advised 'clinically vulnerable' (but not 'clinically extremely vulnerable') individuals to take extra care in observing social distancing and employers should help them to work from home, either in their current role or in an alternative role. If 'clinically vulnerable' individuals cannot work from home, they should be offered the option of the safest available on-site roles, enabling them to stay 2m away from others. If they have to spend time within 2m of others, employers should consider whether this involves an acceptable level of risk and should consider their specific duties to those with protected characteristics, including, for example, expectant mothers who are entitled to suspension on full pay if suitable roles cannot be found.

If an employee wants to remain at home because they live with a 'clinically vulnerable or 'clinically extremely vulnerable' person, what should the employer do?

The employer should allow this, at least in the short term, if other arrangements are not possible. If an employer dismisses an employee because they refuse to come to work in this situation, it may give rise to an automatically unfair dismissal.

Consider each case on its merits. For example, one employee may be able to isolate him/herself from the vulnerable person if they return to work, and significantly lower the risk of any infection, but this may be impossible for other employees. Particular attention should be paid to people who live with 'clinically extremely vulnerable' individuals.

Can an employer dismiss, or refuse to pay, an employee who does not come to work because of COVID-19?

In theory, yes, but if the employee reasonably believes that the threat posed by COVID-19 is serious and imminent, and that it cannot reasonably be controlled, then any dismissal or detriment is likely to be unlawful.

These cases will be fact-dependent, and automatically unfair dismissals may occur in cases where employees are 'extremely vulnerable' or 'vulnerable', or if the employee lives with someone in that category.

What are an employer's obligations towards pregnant women?

Pregnant women are in the 'clinically vulnerable' category. As such, employers should follow the guidance for 'clinically vulnerable' people, (please see 'How should an employer support employees who are considered 'clinically vulnerable'?' above).  Of course, the usual rules relating to the treatment of pregnant women will also continue to apply.

What about employees who are not able to work because they have no available childcare?

Employees are entitled to take reasonable time off for dependants. Employers do not have to pay employees for such periods of leave. Employees do not have to give advance notice, and this type of leave is designed to help parents deal with emergency situations. However, it is not designed to allow employees time off in the medium to long term.  Alternatives, including taking annual leave, should be discussed with the individual.

Employees are also entitled to take up to 18 weeks of parental leave per child. Employers do not have to pay employees for periods of parental leave. However, advance notice is required.

Employees are protected from detrimental treatment by their employees because they have sought to take time off work in circumstances where they have a statutory entitlement. A return to work policy which places a group of employees at a particular disadvantage (such as, for example, women) may constitute indirect discrimination.

We have imposed a recruitment freeze, but can we also stop those we have already offered jobs from joining us when we re-open?

If a new joiner is not needed at the current time, you may decide to defer the start date. If a specific start date has already been confirmed in the contract then the change should be agreed with the employee.

If a job offer has been made but not accepted, the employer can normally change it unilaterally or withdraw the offer altogether without obligation, provided this is communicated before the individual purports to accept it. However, if the employee has accepted the offer a contract will usually have been formed and so if the employee does not agree to defer the start date, or if the business decides to dispense with the role completely, it needs to terminate the contract. In most circumstances, this can be done by paying the notice under the contract.

Can we postpone pay rises and bonuses?

Pay rises are rarely contractual and even if notified, unless a pay rise has already been agreed, deferring it should be straightforward. Many bonus schemes are discretionary and the clauses governing such schemes normally give the employer absolute discretion both over the amount of bonuses and whether they are paid at all. Even contractual schemes may contain provision for the employer to terminate or amend the scheme, so it may be worth checking the precise wording of the scheme rules. Where payments are contractual then reducing or deferring will need to be agreed with the employee.

Can we force employees to take holiday?

Yes, but you are normally required to give double the amount of notice as the amount of holiday you wish them to take. For example, if you want them to take one week's holiday, you need to provide a minimum of two weeks' notice.

We need to accommodate employees who cannot work from home in the workplace, but we do not need our employees to work full time. Can we bring them back part-time and reduce their hours and pay?

It is unlikely that your employment contracts contain a right to do this, and so these changes have to be agreed with employees. Some may be willing to agree, particularly if the change is not significant (a four day week for example) and/or is agreed for a short period of time. Others may be reluctant or simply unable to agree because of their personal circumstances.

In order to push through a contract change, you would need to consult with employees and, if there is still no agreement, dismiss and offer re-engagement on the new terms. You would need to show sound business reasons for pushing through a change of terms (for most, the current crisis will be the reason) and pay notice. If there are 20 or more employees at risk as a result of these changes, further obligations apply (see 'If we need to reduce the hours for a large number of people, is the process the same' below).

You may also be able to use the flexible mechanism within the updated Coronavirus Job Retention Scheme, or (from 1 November 2020) the forthcoming Job Support Scheme so that employees work some days but remain furloughed when they are not working. See our employer FAQs.

If we need to reduce the hours for a large number of people, is the process the same?

If you are proposing that 20 or more employees could be dismissed as a result of this process, then you will also need to go through collective consultation with specially elected employee representatives (or the union or an appropriate representative staff body if there is one) for at least 30 or 45 days (depending on the numbers).  

We have been forced to consider redundancies as a last resort.  What are our obligations?

If you need to consider dismissing employees by reason of redundancy, you should seek specialist advice as soon as possible.

 

What financial support is there for employers and employees who are unable to work due to Covid-19?

Until 1 November, you may be eligible to claim under the Coronavirus Job Retention Scheme.  From 1 November, this is being replaced by the Job Support Scheme.  Employers who have claimed under the Coronavirus Job Retention Scheme may also be eligible for the Coronavirus Job Retention Bonus.

Coronavirus Job Retention Scheme
What payments are available?

The Coronavirus Job Retention Scheme enabled all UK employers to apply to the Government to continue paying 80 per cent of their employees' salary costs for those employees who are furloughed (on a leave of absence) as a result of the COVID-19 pandemic. Since 1 August 2020, employers have only been able to access the scheme for employees who had already been furloughed under the scheme before 10 June 2020 and employers have been asked to share the cost of paying furloughed employees' salaries so will be able to claim less from the Government (see "How has the furlough scheme changed since it opened?" below).

How has the furlough scheme changed since it opened?

The key changes are as follows.

First, since 1 August 2020, employers are no longer able to seek reimbursement of the national insurance and pension contributions (estimated to be around 5% of the cost of the scheme on average). Since September, employers have had to start paying 10% of the furlough salary (with the Government paying 70%) and from October, this will increase to a 20/60% split. The scheme will close for good on 31 October 2020.

Second, the scheme closed to new applicants on 30 June, in anticipation of the scheme beginning to offer "maximum flexibility" from 1 July. This means that the furlough scheme is now only available for employees who were previously placed on furlough on or before 10 June and who therefore completed the previous three-week minimum furlough period by 1 July. The exceptions to this are those returning from statutory family leave (including maternity, adoption or shared parental leave), and armed military reservists.

Third, since 1 July employers have been able to bring back any previously furloughed employees on a part-time or flexible basis, while still claiming under the scheme for the normal hours not worked (though employers can still furlough employees on a full-time basis should they wish). There is also no longer a minimum period for which an employee must be put on furlough (as mentioned above, before 1 July the minimum period was three weeks). Both of these features will be particularly helpful for employers who are planning a phased return to work over the coming months. For further details of how this "flexible furlough" will work, see update here.

What is included in the payments and is there an upper limit?

Yes, the Government will pay a certain percentage of the salary costs of eligible employees. From 1 October 2020, the Government will contribute 60% up to a cap of £1,875, per month for each employee. The salary on which to base the calculation is the employee's gross salary in the pay period to 19 March (however, if you have calculated salary based on 28 February as per earlier guidance and this is different then you can choose to base it on that calculation instead). This includes other regular cash payments that you are obliged to pay, such as past overtime and compulsory commission payments but not discretionary bonus and commission payments. The cost of benefits should not be included in the reference pay. The Government will continue to support businesses in paying their employees' salaries until October, but since 1 August 2020 businesses have been asked to share the cost on a sliding scale (see "How has the furlough scheme changed since 1 July?" above).

How do I calculate pay for zero hour workers?

If an employee on variable pay, such as a zero hours or casual employee, has been employed for 12 months, you can claim the higher of: the same month's earning from the previous year, or average monthly earnings from the 2019/2020 tax year. For those who have been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

Can I apply for payments for all my employees?

No, the scheme only applies to those on PAYE, including zero-hours and casual employees, office holders such as salaried company directors and salaried LLP members (apprentices are also included). Further, since 1 July, there has been an added requirement that employees must have been previously placed on furlough on or before 10 June (see "How has the furlough scheme changed since 1 July?" above). Payments will also not be available for employees who continue to work for your organisation (other than unpaid voluntary work and training) during any periods which have been designated furlough periods (whether as part of a full- or part-time furlough arrangement).

What about those employees who are on sick leave?

The latest Government guidance states that you can furlough employees on sick leave (though note that the scheme closed to new entrants on 30 June (see "How has the furlough scheme changed since 1 July?" above). It highlights that short term illness or self-isolation should not of itself be a reason to furlough but if there are business reasons then employees on sick leave can be furloughed along with other employees. If so those employees should not receive sick pay but furlough pay instead. Employers can equally decide to furlough employees on long term sick leave. An employee on furlough who becomes ill is entitled to receive payment equal to at least SSP but the employer can choose whether to continue to furlough and pay furlough pay. Those employees who are self-isolating in line with public health guidance, because they themselves are vulnerable, can be put on furlough.

We have employees who are currently on maternity and shared parental leave – can they be furloughed?

Employees on statutory family leave will continue to receive their statutory payments in the normal way (for example statutory maternity pay at 90% of salary for the first six weeks of leave, followed by 33 weeks at the statutory flat rate). If you offer enhanced contractual pay for maternity and other forms of statutory family leave, this can be claimed through the scheme as wage costs. They will be treated as still on statutory family leave alongside furlough leave, with the various rights that that entails, but employers can claim a grant in relation to 80% of any enhanced contractual pay. An employee who returns from maternity leave or other statutory leave will be entitled to be paid furlough pay based on the pre-leave salary, not the reduced pay, if any, they received before the return. Note that employers can furlough those who return from statutory family leave after 10 June, even if they were not previously furloughed (see "How has the furlough scheme changed since 1 July?" above).

How do I apply?

To access the scheme, you will need to:

  • designate affected employees as ‘furloughed workers,’ and notify the employees of this change in writing. You will have to seek employees' agreement to reducing their pay under their employment contract, unless you choose to top up, and to varying any other terms needed for furlough,
  • submit information about the employees to HMRC through a new online portal. This will include your PAYE reference number, number of employees furloughed and the period for which you claim, along with a calculation of the amount.

Since 1 July, there have been additional considerations when calculating and/or submitting claims:

  • The number of employees in any claim period after 1 July must not exceed the maximum number of employees claimed for under any claim before 30 June. For example, if an employer has previously submitted three claims before 30 June, with a total of 50, 40 and 60 employees furloughed in each respective claim, the maximum number of employees that can be furloughed in any single claim after 1 July is 60 (though certain employees, such as those returning from statutory family leave, will not count towards this total).
  • Since 1 July, employers have not been able to claim for periods that straddle calendar months. So, in the above example, one claim had to be made for the period to 30 June and another for the post 1 July period.
  • Generally, a claim period must be for a minimum of 7 days (though there are occasions when it may be less).
  • Employers will need to calculate and submit to HMRC employees' usual hours, and the number of hours actually worked/not worked for the claim period in question. This means that, before submitting a claim, employers will need to know the exact number of hours an employee has worked and not worked, which may limit employers' ability to submit claims before the end of the claim period. There are also complicated rules regarding how an employee's "usual hours" are calculated, depending on whether they work fixed or variable hours. For further details, see Steps to take before calculating your claim.

When combined with the gradual phasing-in of employer contributions to furloughed employees pay (see "How has the furlough scheme changed since 1 July?" above), there are concerns that the above features (and others) of the flexible furlough scheme render it so complicated that employers may be put off from applying for it. If you are in doubt about how to submit a claim and/or how to perform the calculations involved, it is advisable to check the Treasury Direction or seek legal advice if necessary.

When will I receive the money to pay my employees?

HMRC has committed to pay within six working days of a claim being submitted according to the Claim Guidance.  HMRC has asked employers not to contact unless they have not received payment more than ten working days after submitting their claim.

How long will I be able to claim for?

The scheme will end on 31 October 2020. From 1 November 2020, employers may be able to access the Job Support Scheme instead. See the Job Support Scheme FAQs below.

Do I have to pay the difference between what the Government pays and the employee's full salary?

No. The employer can choose to fund the difference but does not have to. Since 1 August 2020, the Government requires employers to share the cost of salaries under the scheme (see "How has the furlough scheme changed since 1 July?" above) but there will still not be a requirement to top up to full pay.

What happens to holiday for employees on furlough leave?

Holiday continues to accrue in the usual way during furlough, and your employees can take, or be required to take, holiday in the same way as if they were working normally. However, the guidance now makes it clear that employees will be entitled to their full pay for any periods taken as holiday, so if you agree to or require holiday to be taken during furlough leave you would have to top up the furlough pay to full pay for that period.

Do I have to pay national minimum wage?

No. This means that even if an employee's reduced salary would fall below the NMW you would not have to top up their pay. However, if they are undertaking training during the leave then you would need to ensure that the furlough payment is sufficient so that NMW is paid for the time spent on the training.

Business has reduced significantly but some of our team are still busy. To make it fair can I furlough half the team for a period and then rotate with the other half?

Under the original scheme, employees had to be furloughed for a minimum period of 3 weeks at a time. Since 1 July, there has been no minimum period for which an employee must be furloughed. Therefore, provided employees are eligible to be placed on flexible furlough (see "How has the furlough scheme changed since 1 July?" above), and subject to obtaining the employees' agreement in relation to their working arrangements, teams can be rotated and otherwise asked to work flexibly without limitation.

Will our share plans continue as normal when employees are furloughed?

Some HMRC tax sponsored share plans require that employees satisfy a minimum working time commitment. This is particularly relevant for Enterprise Management Incentives (EMI) which are popular with high growth entrepreneurial businesses. Since a furloughed employee may no longer meet the working time requirement, there is a risk that their outstanding EMI options will be disqualified. Representations are being made to HMRC to provide a concession given the circumstances, to ensure these options continue to benefit from the tax incentives.

Questions also arise for Save As You Earn (SAYE) and Share Incentive Plans which operate through deductions from salary. As a furloughed employee will have a reduced salary, the employee may want to adjust the contributions they make to the plans. This will be problematic under SAYE where contributions must be made at a fixed rate throughout the savings period and so cannot be changed. As an alternative, a SAYE participant may be able to take a savings holiday for up to 12 months.

How do I end employees' furlough?

If a furlough agreement is in place, the employees' furlough ends in accordance with the terms of the agreement. If there is no agreement in relation to how to end furlough, by giving notice to the employee that they are required to return to work and when. Notice should be reasonable and in writing and employers should consider if any associated requirements are necessary such as health and safety consultations, reasonable adjustments etc.

What happens to an employee's pay when their furlough ends?

Employees' pay and other conditions should return to normal i.e. the same as they received pre-furlough. If employers wish to provide anything less than full pay, they should consult employees and reach a written agreement.

How do I choose who should return to work?

Asking for volunteers might be the best option but if there are not enough volunteers, or not enough volunteers in the different functions that may be required to run the business, you might need a mandatory selection system. You should consider potential discrimination or procedural/fairness issues when selecting which employees will return to work and think about allowing vulnerable employees or those with caring responsibilities to continue working from home or to remain on furlough if appropriate. Since 1 July, employees have been able to return on a part-time or flexible furlough arrangement (see "How has the furlough scheme changed since 1 July?" above).

 

Coronavirus Job Retention Bonus
What is the Coronavirus Job Retention Bonus?

Employers may be eligible to receive a taxable "bonus" of £1,000 per employee who was previously furloughed under the Coronavirus Job Retention Scheme and remains employed at 31 January 2021.

Which employers can claim the Coronavirus Job Retention Bonus?

Any employer which has furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme will be eligible to claim for the Coronavirus Job Retention Bonus, provided that the employee eligible criteria set out below are met. However, if an employer has had to repay any amounts received under the Coronavirus Job Retention Scheme in respect of a particular employee, for any reason, they will not be eligible to claim the Coronavirus Job Retention Bonus for that employee. Employers may make a claim under the new Job Support Scheme and remain eligible for the Coronavirus Job Retention Bonus.

Which employees can an employer claim for?

Any employee:

  • For whom the employer made an eligible claim under the Coronavirus Job Retention Scheme (employers are precluded from claiming the Coronavirus Job Retention Bonus in respect of any employees for whom they made an incorrect claim);
  • was continuously employed by the employer from 1 November 2020 – 31 January 2021;
  • who is not serving notice (contractual or statutory) on 31 January 2021 (including notice of retirement); and
  • who was paid the "minimum income threshold" by their employer (see below).

Note the Coronavirus Job Retention Bonus is not limited to employees. Employers can also claim for office holders and workers, provided the other criteria are met. 

What is the "minimum income threshold"?

To be eligible, employers must have paid the relevant employee a total of at least £1,560 (gross) in aggregate in respect of the tax months of:

-           6 November to 5 December 2020;

-           6 December 2020 to 5 January 2021; and

-           6 January to 5 February 2021.

The employee must also have been paid at least one payment of taxable earnings (of any amount) in each of the above tax months.

When can employers claim the Coronavirus Job Retention Bonus?

Applications will be able to be made between 15 February – 31 March 2021. Further guidance on how to access the online service will be made available from the end of January 2021.

 

Job Support Scheme
What is the Job Support Scheme?

There are two variations of the JSS –"JSS Open" for those businesses that are allowed to remain open but are struggling due to the pandemic, and "JSS Closed", for businesses that have been required to close as a direct result of restrictions set by one of the four governments of the UK.  JSS Closed does not apply, however, to businesses required to close by public health authorities due to specific workplace outbreaks of the virus.  Under JSS Open, employers will be able to claim a grant towards the cost of paying employees when they are not working, provided there is sufficient work for employees to work at least one-fifth of their normal working hours. It is not yet clear whether there will be any requirements on what that "work" must involve (for example, whether it must be the employee's normal job, or whether employers can provide employees with alternative work).

Is my business eligible?

All small and medium size businesses are automatically eligible for the scheme. The Government has not yet specified who small and medium size businesses are for this purpose. However, it is likely to be employers who satisfy two out of three of the following: (1) turnover of less than £25 million; (2) fewer than 250 employees; and (3) gross assets of less than £12.5 million.

Large businesses may also be eligible, provided that they meet a financial assessment test, known as a Financial Impact test.  If the employer's turnover has remained equal or has decreased compared to the previous year, they will qualify.

Employers of any size need a UK bank account and a UK PAYE scheme in order to claim the grant. Employers do not need to have previously used the Coronavirus Job Retention Scheme.

Which employees can I claim for?

Employers can claim for any employees who were on payroll (in other words, for whom an RTI submission was made to HMRC) on or before 23 September 2020.

For the first three months of the scheme, employees must work at least one-fifth of their usual working hours unless you are required by law to close your business (in which case, see 'What if I am required by law to close my business'). After the first three months of the scheme, the government will consider whether to increase this threshold.  

For salaried or fixed hour employees, normal working hours will be assessed by reference to their contractual hours. It is not yet clear whether employers will be able to claim grants under the scheme for zero hour workers, or the extent to which employees must actually perform any duties in exchange for pay.

Employees can be moved on and off the scheme, and their working hours can be changed (provided they are not reduced below one-fifth of normal working hours) as long as each short time working arrangement lasts for a minimum of seven days at a time.

What can I claim for?

For every hour of their normal working hours that an employee is not working, an employer can claim a grant of 61.67% of their usual wage, subject to a cap of £1,541.75 per month per employee. The grant will not cover Class 1 employer NICs or pension contributions, which remain payable by the employer, and the employer will remain liable in relation to NICs and income tax calculated by reference to the total amount paid to the employee, irrespective of whether the money came from a scheme grant or from the employer.  The employer must contribute 5% of the usual pay in respect of the non worked hours in order to be eligible for the grant.

Do I need to pay employees when they are not working?

In order to claim the grant under JSS Open, employers must pay employees 5% of their usual wage for every hour of their normal working hours which is not worked.

Employers may top up an employee's pay for hours when they are not working, but it is not a requirement of the grant scheme that they do so beyond the 5% mandatory contribution.  In all circumstances, employee consent must be obtained in writing and in accordance with normal employment law principles for any reduction to their normal pay.

What if I cannot provide all of my employees with enough work?

If you cannot provide employees with sufficient work, and cannot afford to continue paying employees when they are not working, then redundancies may be your only option. You should seek specialist employment law advice urgently.

Can I dismiss employees by reason of redundancy and claim a grant in respect of them under the JSS?

No. If you are claiming for a contribution under the JSS towards an employee's wages then you cannot make that employee redundant or give notice of redundancy. If you wish to make an employee redundant, you must first bring them off the JSS, and then follow the appropriate redundancy process.

Can I make capital distributions (such as dividends) whilst I am claiming a grant from the JSS?

The current guidance states that the Government expects large employers not to make any capital distributions whilst claiming a grant from the JSS. It remains unclear whether this will be prohibited.

How long will the JSS last?

The JSS will be in place until at least 30 April 2021.

Can I claim the Coronavirus Job Retention Bonus as well as sums under the JSS?

Yes, provided you meet the eligibility criteria for both – see "What is the Coronavirus Job Retention Bonus?"

Do I need to have participated in the Coronavirus Job Retention Scheme in order to access the JSS?

No, neither the employer nor the employee needs to have claimed under the Coronavirus Job Retention Scheme in order to access the JSS.

What if I am required by law to close my business?

The Government has announced an expansion to the Job Support Scheme (the "JSS Closed") [see "Job Support Scheme FAQs" for further information] for businesses whose premises are legally required to shut as part of local or national restrictions (i.e. restrictions set by one or more of the four governments in the UK). JSS Closed does not apply, however, to businesses required to close by public health authorities due to specific workplace outbreaks of the virus.   Under JSS Closed, employers will receive grants to pay the wages of staff who cannot work.

What payments are available?

The Government will pay eligible employers two thirds (67%) of each eligible employee's salary, up to a maximum of £2,100 a month.

When will payments become available?

As with the Job Support Scheme, JSS Closed begins on 1 November 2020 and will be available for 6 months until 30 April 2021, with a review point in January.

Payments will be made in arrears via HMRC. The online claims service will be available from early December.

Will employers have to contribute?

Employers will be required to cover employees' NICs and pension contributions, but will not have to contribute towards wages (though they may top up if they wish).

Which employers are eligible?

Employers can only claim the grant while they are subject to restrictions that legally require them to close. This includes businesses that are required to provide only delivery and collection services from their premises. Note that employers forced to close by local public health authorities as a result of specific workplace outbreaks will not be eligible.

There is no requirement for employers to have previously used the Coronavirus Job Retention Scheme [see "Coronavirus Job Retention Scheme FAQs" for further information]. Employers will be expected to agree changes to the employee's employment contract with the employee, and to notify them in writing that they intend to access JSS Closed.

Large employers will be expected not to make capital distributions (e.g. dividend payments, share buybacks etc.) while accessing JSS Closed.

Which employees are eligible?

Employers can only claim under JSS Closed for employees who have ceased work for a minimum of 7 consecutive days. Employees cannot be made redundant or put on notice of redundancy during the period for which their employer is claiming under JSS Closed for them.

To be eligible, employees must also have been employed on their employer's payroll as of 23 September 2020 and an RTI submission must have been made to HMRC on or before that date.

 

 

 

Statutory sick pay
Do we have to pay statutory sick pay to people who have COVID-19?

Yes, employers must pay SSP to employees who are unable to work because of illness.  This includes employees who are off sick due to COVID-19 or COVID-19 symptoms, such as a persistent cough or fever.

Do we have to pay SSP to people who are self-isolating?

Employees who self-isolate but who are not ill would not previously have qualified for SSP – however, the Government has introduced new rules which mean that employees who are self-isolating to prevent the spread of COVID-19 will be entitled to SSP if they "by reason of that isolation, are unable to work".  This includes employees self-isolating because someone in their household has COVID-19 or COVID-19 symptoms; or they have been told to self-isolate by a doctor or NHS 111.

This advice is published under the Government’s ‘stay at home’ guidance and is available on gov.uk website.

Do we have to pay SSP to employees who are self-isolating but able to work?

If the employee is not unwell but self-isolating due to Government guidance and able to work remotely, they will not be entitled to SSP but their usual pay.

At what point does SSP become payable?

SSP relating to COVID-19 is payable from the first day of incapacity. This will have retrospective effect from 13 March 2020, meaning some employees will be entitled to have their sick pay back-dated. 

When can we ask for evidence of an employee's illness or reasons for self-isolation?

Employees can self-certify their sickness or self-isolation absence for the first seven days off work in the usual way. After seven days' employers may ask for reasonable evidence of incapacity from the employee. 

On 20 March 2020, the Government announced a new online isolation note service which the employee can access on the NHS website and NHS 111 online.  They can then use the note received to send to their employer as evidence.

When do we have to pay company sick pay?

Company sick pay is only payable to employees if the employer has a company sick pay policy and gives its employees sick pay over and above the SSP amount.  Whether company sick pay is due to self-isolating employees will depend on the policy.  Some policies will be linked to SSP and the same rules will apply. However, others may require the employee to actually be unwell to receive enhanced pay – no doubt never envisaging a situation like the one we have now.  Employers should be as flexible as they can, particularly if there is otherwise a risk that employees will come into work putting themselves and others at risk.

Can employers get help with paying SSP?

Employers with fewer than 250 employees will be able to reclaim SSP paid in respect of the first 14 days of COVID-19 related sickness absence per employee under new legislation. This will have retrospective effect from 13 March 2020 for those who have COVID-19 symptoms or those self-isolating, and from 16 April for those who are shielding.

 

Other absence and pay
Do we have to pay employees if we have closed the office or asked staff not to come to work?

An employer will usually have to keep paying their employees full pay if they decide to close the office or tell staff not to come into work.  For those who can work from home this should not pose a problem, but as a general rule, even if employees are unable to work remotely but are willing and able to work, they should still be paid their normal pay (unless there is a right to lay off, see section on "Is lay off and redundancy the same thing?"). Depending on the circumstances, the employer may be able to take advantage of the new job retention scheme (see first section on "Coronavirus Job Retention Scheme")

Do we have to pay employees who are abroad on work trips and cannot get home?

Yes, if the employee is trapped abroad because of work related travel, it is best practice to continue paying the employee full pay.

Do we have to pay employees if they are legally obliged to stay at home due to compulsory quarantine?

Under new regulations, there are powers to compulsorily detain people for testing and isolation and to place restrictions on travel.  If an employee was quarantined under the regulations, it would illegal for them to come into work.  This means that they would not be regarded as “able” to work and they would not have an implied right to receive their pay (providing they could not work remotely from quarantine). It is likely that in such a case, the employee would qualify for SSP. 

 

Annual leave
Can we ask employees to take their holiday allowance?

Yes, providing they are not sick. Employers can ask employees to take holiday at a particular time, provided they give sufficient notice. Unless this is specifically dealt with in the contract, it should be at least double the amount of holiday leave the employee is asked to take.

Can we ask sick employees to take their holiday allowance?

Employees who are on sick leave (including those who are at home due to self-isolation) cannot be compelled to take their holiday allowance.  However, they can ask to take their holiday allowance if they choose to.

Can an employee ask to take holiday when they are receiving SSP?

Yes, an employee can choose to take holiday during a period when they would otherwise be receiving SSP, but cannot be compelled to do so.  Holiday pay should be paid for any period allocated as holiday, rather than sick pay. 

An employee's holiday flight has been cancelled, do we have to let them cancel their pre-approved holiday request?

When an employee has to cancel their holiday plans and wants to retract their request to take the holiday another time, the employer can choose whether to allow them to do so. Many employers prefer for employees to take as much of their holiday as possible during the crisis when there is a reduction in work and would have the right to refuse a request to cancel the holiday,

Can we refuse to cancel a holiday request if the employee is unable to travel because they are self-isolating?

If an employee has to cancel their holiday because they are sick, or because they have been advised to self-isolate, the position is different. In such a case, the employee has the right to postpone the holiday.

We have had to ask employees to cancel their pre-booked holidays and to work overtime because of increased demand on our business. We don’t know if we can manage all the accrued holiday when this is over, as there may not be enough time for employees to take it before the end of our holiday year - what can we do?

The Government has addressed this concern in new emergency regulations which provide an exception to the bar on carrying forward untaken holiday. The regulations provide that, where it has not been reasonably practicable for a worker to take some or all of their annual leave as a result of the effects of COVID-19 (whether the effects are on the worker, the employer or the wider economy or society), the untaken leave may be carried forward and taken in the following two holiday years. The regulations apply to the minimum four weeks annual leave, not the full 5.6 weeks or any additional contractual holiday, though as an employer you can agree for this to be carried forward in any event (and many employers already provide for some carry over in their contracts and policies – the emergency regulations will not change those arrangements).

 

Homeworking
An employee who is working from home is now also providing childcare, can I stop them working from home?

With schools closed for an indefinite period to all children except those of key workers, many parents will have no choice but to look after them at home. While normally, you would not have to permit homeworking for parents providing childcare, in these extraordinary circumstances employers may have to be more flexible. In any event, requiring employees to come into work unless necessary would be contrary to current Government advice on social distancing. Discussing with the employee whether some work can be done outside core hours, for example in the evening after children's bedtime, and/or carried out in shorter bursts throughout the day may be a solution. The most recent guidance states that employees who are unable to work because of childcare, presumably even if there would otherwise be work for them to do, can be furloughed (see section above on the Coronavirus Job Retention Scheme).

Several of our employees are self-isolating, can we require them to work from home or does it have to be treated as sick leave?

If an employee is self-isolating but is not unwell then if they are able to work from home you can require them to do so. If their job is not suited to homeworking then employees who are self-isolating as a result of Government advice will be entitled to SSP (and any contractual sick pay that may be payable depending on the policy). If there are business reasons to do so, an employer may choose to put an employee who is self-isolating on furlough leave and pay them under the job retention scheme provisions instead of paying sick pay.

Can we require our employees who hold Tier 2 or Tier 5 visas to work from home?

Generally the Government (specifically the Home Office) require all Tier 2 and 5 Sponsors to report any change of work location for sponsored employees via the Sponsor Management System (SMS). This report should be filed within 10 working days. Failing to report the change in work location may expose your business to a sponsorship compliance breach.

However, from late March the Government has relaxed this position and confirmed that all employees who hold Tier 2 or Tier 5 visas will be permitted to work from home during the lockdown period. Furthermore, no report via your SMS will be necessary to record this.

 

Caring for family
Do we have to give employees paid time off to look after children or a sick family member?

Employers should check the employment contract and their workplace policies.  The employment contract may provide for a contractual right to paid time off in certain circumstances. In the absence of a contractual right to paid time off, there is no statutory right to paid time off to look after dependents, but unpaid leave is available (see below).

Can employees take unpaid leave to look after dependents?

Employees have a statutory right to a reasonable amount of unpaid leave in order to manage emergency situations involving their dependents.  This would include situations where an employee has to care for a family member who has COVID-19, or to look after their children because of school closures. Unless their employment contract provides otherwise, the right is only to "reasonable" time off and the employee is expected to arrange for alternative care if possible so this right is limited.  Employees with children may also be entitled to unpaid parental leave in certain circumstances, which can provide for longer periods of leave. With either type of leave, employers are encouraged to be more flexible than they would perhaps be in normal circumstances. 

 

Vulnerable employees
What is the Governments' guidance on social distancing and vulnerable employees?

The Government has published guidance on ‘social distancing’, which advises for everyone to practice social distancing but for those who are at an increased risk of severe illness from COVID-19 to be particularly stringent in following social distancing measures, including avoiding public transport and remaining at home if possible.  This vulnerable group includes those who are over the age of 70 or under 70 with an underlying health condition, including those who are pregnant or those who have a chronic long term respiratory disease or a weakened immune system.

Employers should allow any employees who fall into the high-risk groups to work from home if possible.

Do employees social distancing qualify for SSP?

It is clear that those employees who are required to self-isolate and are unable to work will qualify for SSP.   The Government’s advice on social distancing does not currently go as far as to recommend full self-isolation.  Technically, SSP does not extend to vulnerable employees who are social distancing.  However, we expect that the rules on self-isolation, and therefore SSP, will be interpreted to capture vulnerable employees.

What duties do we have to vulnerable employees?

Employers have health and safety obligations to all employees, including those who are particularly at risk.  Vulnerable employees should be allowed to work from home if at all possible.

Should we ask pregnant employees to work from home?

Yes, pregnant employees should work from home wherever possible.

What if a pregnant employee cannot work remotely?

If a pregnant employee cannot do their role remotely, employers should assess whether there is suitable alternative work available which the employee could do from home on a temporary basis.  If no such alternative work is available, the employer should consider suspending the employee on medical grounds on full pay for as long as necessary.  Maternity leave will be triggered if the period of suspension continues into the fourth week before the expected week of childbirth.

 

Reducing business costs
We have imposed a recruitment freeze but can we also stop those we have already offered jobs from joining us?

If a new joiner is not needed at the current time, you may decide to defer the start date. If a specific start date has already been confirmed in the contract then the change should be agreed with the employee.

If a job offer has been made but not accepted, the employer can normally change it unilaterally or withdraw the offer altogether without obligation, provided this is communicated before the individual purports to accept it. However, if the employee has accepted the offer a contract will usually have been formed and so if the employee does not agree to defer the start date, or if the business decides to dispense with the role completely, it needs to terminate the contract. In most circumstances, this can be done by paying the notice under the contract.

Can the business postpone pay rises and bonuses?

Pay rises are rarely contractual and even if notified, unless a pay rise has already been agreed, deferring it should be straightforward. Most bonus schemes are discretionary and the clauses governing such schemes normally give the employer absolute discretion both over the amount of bonuses and whether they are paid at all. Even contractual schemes may contain provision for the employer to terminate or amend the scheme so it is worth checking the wording. Where payments are contractual then reducing or deferring will need to be agreed with the employee.

Can we make employees take unpaid leave to save costs?

Unless there is a lay off clause in the employment contract (and such clauses are rare, see section on "Is lay off and redundancy the same thing?"), an employee can't be forced to take unpaid leave. Such a measure must therefore be agreed with your employees. Under the new retention scheme, if an employer can't afford to retain staff, a better option would be to designate such employees as "furloughed" so that the employer can get reimbursed up to 80 per cent of their salary costs (up to a cap of £2,500 per employee per month). For further detail on furloughed leave see first section on "Coronavirus Job Retention Scheme".

We still need our staff to do some work, can we reduce their hours and pay?

Again, it is unlikely that your employment contracts contain a right to do this, and so these changes have to be agreed with employees. Some may be willing to agree, particularly if the change is not significant (a four day week for example) and/or is agreed for a short period of time. Others may be reluctant or simply unable to agree because of their personal circumstances. In order to force through a contract change, you would need to consult with employees and, if there is still no agreement, dismiss and offer re-engagement on the new terms. You would need to show sound business reasons for pushing through a change of terms (for most, the current crisis will be the reason) and pay notice. It is not clear if the job retention scheme (see first section on "Coronavirus Job Retention Scheme") may then apply at this point – if so, consideration will need to be given as to how to deal with those employees who have agreed to continue working for less, while some of their colleagues receives pay, perhaps even a similar amount, for being on leave.

If we need to reduce the hours for a large number of people, is the process the same?

If you are proposing that 20 or more employees could be dismissed as a result of this process, then you will also need to go through collective consultation with specially elected employee representatives (or the union or an appropriate representative staff body if there is one)  for at least 30 or 45 days depending on the numbers. It may be possible to argue that this period can be reduced or dispensed with because of the extreme circumstances businesses are facing - this so called "special circumstances" defence has in the past been extremely difficult to rely on so this may be a risky strategy however.

We have been forced to consider redundancies as a last resort, what are our obligations?

First, consider the Coronavirus Job Retention Scheme (see above) as a way of avoiding immediate redundancies. In circumstances where redundancies become necessary, the key obligations are summarised below.

Employees with more than two years' service have the right not to be unfairly dismissed. To ensure a fair dismissal for a genuine redundancy, e.g. where there is a cessation or diminution in a certain type of work, an employer will first have to consult with employees at risk, and apply a fair selection process based on objective criteria. Redundancies shouldn't be confirmed until consultation has taken place and once confirmed, all employees should be given their contractual notice (or payment in lieu of notice) together with a statutory redundancy payment (for those with more than two years' service).

Where you are proposing to make more than 20 employees redundant then you should also conduct collective consultation with elected representatives of the employees, for at least 30 or 45 days depending on the numbers (see 'Collective consultation for redundancies' section below).

Collective consultation for redundancies

When are employers required to undertake collective information and consultation in respect of potential redundancies?

When a business is proposing to dismiss as redundant 20 or more employees in one establishment within a period of 90 days or less. 'Redundant' for these purposes is broader than the usual meaning of redundancy and includes situations when employers want to dismiss and re-engage employees on new terms and conditions. An 'establishment' is generally understood to be the "unit to which workers made redundant are assigned to carry out their duties" but is often fact dependent.

When must collective redundancy consultation commence?

If you are proposing to make employees redundant, you must collectively consult in "good time" and at least 30 days before the first dismissal if there are between 20 and 99 affected employees, or 45 days if there are more than 100 affected employees, unless there are special circumstances. It is possible that the special circumstances defence could apply in light of the pandemic but care should be exercised before relying on this defence, and it does not in any event dispense with the obligations altogether.

Who must be consulted in collective redundancy consultation and can it be done during furlough?

Employers need to consult "appropriate representatives" which may be trade union representatives or employee representatives. Employers will need to consider the additional complications in relation to how to successfully consult remotely. Although the Treasury Direction governing the job retention scheme requires that employees undertake no work at all during furlough, the Government guidance says employees can be made redundant while on furlough and being the subject of consultation is unlikely to constitute work. Similarly, employee representatives who are on furlough are generally thought to be permitted to carry out their consultation duties.

What are the consequences of failing to comply with collective redundancy consultation?

Employers can be liable for a protective award of up to 90 days' pay per affected employee. The award is penal in nature so is based on the seriousness of the employer's failure rather than loss suffered by the employees.

If an employee's employment is terminated following lockdown, will they be entitled to redundancy pay?

If an employee has at least two years' continuous employment and their employment is terminated by reason of redundancy as a result of lockdown, and subject to them not refusing suitable alternative employment with the employer, if any, they will be entitled to statutory redundancy pay based on their pre-furlough pay.

Employers should be aware that the Government's guidance indicates that furlough grants can be used to pay employees during the consultation period. Notice periods may also run during furlough leave. However, the grant cannot be used to substitute redundancy payments.

 

UK lock down
I am worried my business will be ordered to shut, how can we protect our employees?

Although we are not yet at a point of a complete UK lockdown, some businesses have already been ordered to close and it is possible that others will follow. Some employers may be able to continue to operate with staff working from home (see section on "Homeworking"). If that is not possible and you would otherwise have to make employees redundant or agree a period of unpaid leave, you can apply to the coronavirus job retention scheme (see first section on CoronaVirus Job Retention Scheme) which will pay 80 per cent of each employee's salary costs (up to £2,500 per month) while they are not working.

We are able to continue to provide some services, can we ask employees to do different jobs?

Some pubs, restaurants and cafes which have had to close down have switched to offering take away food. This could involve some employees carrying out different duties. If you need to ask employees to carry out work that is not within their usual job description or what the employment contract permits, you may have to seek their agreement. However, in the circumstances, it is unlikely that employees will refuse if it means the business can keep running and they continue to be paid. (See "We still need our staff to do some work, can we reduce their hours and pay?")

In light of the Government's wider shutdown measures announced on 23 March, are we able to ask that our employees continue to come to work in the usual way?

At the time lockdown was introduced, the Government advice was that, save for key workers, people should only travel to and from work where "absolutely necessary". On 11 May, the Government updated its guidance to state that all reasonable steps should be taken by employers to help people to work from home, but for those who can't work from home and whose workplace has not been told to close, employees can be asked to go to work.

The list of business and venues that have been told to remain closed can be found here. The Government has indicated that non-essential retailers could be allowed to re-open from 1 June but only if they meet the Covid-19 safety and security guidelines (please see our 'Health and Safety obligations' section above).  

 

Immigration issues
Can I put my employees with Tier 2 or Tier 5 visas on a period of unpaid layoff?

Currently, with the exception of some forms of statutory leave, an employer is required to stop sponsoring an employee if they are absent from work without pay for 4 calendar weeks in a year or more. So placing a sponsored employee on a layoff totalling 4 weeks would not be permissible. Right now, a better option may be to designate such employees as "furloughed" if they otherwise qualify, and subject to any further guidance on this that is still awaited. See first section on CV retention scheme.

However, it is possible that the government may relax the rules on unpaid leave for sponsored employees in light of the current situation.

Will I be allowed to reduce the salary of employees with Tier 2 or Tier 5 visas?

Yes, but any reduction in salary must not be below the appropriate rate detailed within the Immigration Rules, and it should be reported to the Home Office. The 'appropriate rate' will depend on the specific role of a sponsored employee. It is worth mentioning that there are some limited exceptions to this, however if a sponsored employees salary package is cut to below the appropriate rate, then you will have to stop sponsoring them.

Right now, a sensible option would be to review the appropriate rate for each of your sponsored employees, and then formulate what, if any, permissible salary reductions could be made.

Are we still required to complete Right to Work (RTW) checks during this period of remote working?

Yes. However, from 30 March the Government has introduced a relaxation of RTW guidance including the temporary acceptance of photocopies of the required documents to obtain a statutory excuse against a Civil Penalty for Illegal Working. See our full guidance here.

How should I now complete RTW checks during this period?

Employers should follow 3 steps:

  • Step 1:  Ask the individual to submit a scanned copy or a photo of their original documents by email or using a mobile app.
  • Step 2:  Arrange a video call with the individual and ask them to hold up their original documents to the camera, so that they can be checked against the soft copy documents that you have already received.
  • Step 3:  Record the date that you complete this check and note on the individuals documents, "online RTW check completed on [insert date] due to COVID-19".

If your new employee has status under the EU Settlement Scheme or a BRP card, employers should use the UKVI Online Right To Work Service to verify the immigration status of a new employee and combine this with a video link to assess if the individual in question is the same person on the photograph as on the online RTW service. See our full guidance here.

The link to the UKVI online check is here.

Some of my employees are Chinese nationals with visas that are shortly due to expire, but they cannot return to China right now because of COVID-19. What can they do?

The Government have announced some concessions specifically for Chinese nationals (and non-Chinese nationals that normally live in China) who are currently in the UK, that will allow them to remain here if their current visa is due to expire before 31 March. If you have employees that might be affected, then they will get an automatic extension of their visa, without having to file a new visa application.

It is possible that the government may widen this concession to include other nations of other non-EEA countries that cannot return home due to coronavirus, but this situation remains fluid.

 

Pensions Issues
Are pension contributions included within the Coronavirus Job Retention Scheme?

Yes, at a minimum level. The Coronavirus Job Retention Scheme will cover 80 per cent of furloughed employees' salary costs (up to a maximum of £2,500 a month), plus the employer’s minimum automatic pension contribution of 3% of qualifying earnings, based on the 80% of salary paid under the scheme.

With thanks to our friends at Arc Pensions for the answer to this query. 

Do I have to pay pension contributions for furloughed employees?

Yes. Employers are still liable for auto-enrolment contributions, unless the furloughed employee has opted out or ceased saving into the pension scheme. As noted above, you can claim the cost of the employer’s minimum automatic enrolment pension contributions on the subsidised salary. Any contributions above the statutory minimum would be made at the employer’s cost. If an employer pays the remaining 20% of salary, it should also pay auto enrolment contributions on that amount.

With thanks to our friends at Arc Pensions for the answer to this query.

 

What if I pay contributions of more than 3% normally?

Any contributions above the statutory minimum would be made at the employer’s cost. HMRC’s guidance does not appear to grant a contractual easement for those employers who had agreed to pay employer contributions above the statutory 3% minimum employer contribution.

With thanks to our friends at Arc Pensions for the answer to this query. 

Will furloughed employees continue to make pension contributions?

Yes, unless the furloughed employee has opted out or ceased saving into the pension scheme. It is currently unclear whether there will be an easement for employers who seek to increase an employee’s contribution rate or reduce their own to account for the fact the employer will only be able to recover the statutory minimum contribution on the subsidised salary. Usually a 60 day consultation requirement would apply in order to be able to do this. If you make contributions to an occupational DC scheme, there may also be restrictions in the scheme rules that apply to this kind of change. The Pensions Regulator may issue some guidance to deal with this.

With thanks to our friends at Arc Pensions for the answer to this query. 

Can I suggest that employees consider whether to opt-out of pension saving?

No, even if you may consider it to be in an employee’s interest to consider this option, you risk being in breach of your statutory obligations by inducing an employee to opt out.

With thanks to our friends at Arc Pensions for the answer to this query. 

What else should I be aware of when communicating with employees about their pension at this time?

Employees may well be nervous, particularly those who are approaching retirement, of the impact of COVID-19 on the value of their DC pensions pot. The Pensions Regulator has stressed that there is an increased danger of scam activity in the current climate, so you may want to consider pointing members in the direction of resources including ScamSmart and the Money and Pensions Service.

With thanks to our friends at Arc Pensions for the answer to this query. 

Is there anything I should raise with our pension provider?

You should consider asking your pension provider (or trustees if you have an occupational DC scheme in place) about whether they have reviewed their default investment pathway and whether they have made or are planning any changes in the current volatile investment environment. This is something members may be worried about and would welcome communication about what is being done to look after their pension pot.

With thanks to our friends at Arc Pensions for the answer to this query. 

Can I pay pension contributions late?

No, although the position may change. The Pensions Regulator has not issued any specific guidance in respect of late automatic enrolment pension contributions.

However, the Pensions Regulator has acknowledged publicly that schemes may struggle to meet statutory deadlines and is taking a practical and pragmatic approach to funding issues for defined benefit pension schemes. If there are difficulties with payroll or other administrative issues which mean contributions are paid over late, they may take a similar pragmatic approach to DC arrangements but this is not yet clear.

With thanks to our friends at Arc Pensions for the answer to this query. 

What if I have a salary sacrifice arrangement for pensions in place?

An employee who currently makes contributions by way of salary sacrifice will have agreed to a reduction in their salary to account for the pension contribution being made by the employer on their behalf.

This means their salary for the Coronavirus Job Retention Scheme will be lower than it would otherwise have been. It seems employees who are participating in salary sacrifice will be worse off than those who are not, if the employer doesn’t make any top up payment over the 80% subsidised salary. It is not clear what the implications of this are currently. The employer may also still have an obligation to pay the contributions that have been sacrificed.

With thanks to our friends at Arc Pensions for the answer to this query. 

What does TPR say about auto enrolment?

Auto enrolment obligations continue as normal. This means employers must continue to make their own contributions, collect the right contributions from employees and also deal with re-enrolment and re-declaration.

With thanks to our friends at Arc Pensions for the answer to this query. 

Can I delay re-enrolling employees?

YES. TPR says employers can delay re-enrolment for 3 months to take account of COVID-19 related difficulties.

With thanks to our friends at Arc Pensions for the answer to this query. 

What if I pay more than the statutory minimum already?

An employer’s obligation to pay more than the statutory minimum is unaffected by the COVID-19 crisis but the excess will not be covered by the CJRS. TPR reminds employers they might be paying more than the statutory minimum for a number of reasons. These include paying more than 3% or paying contributions based on something more than “qualifying earnings”.

With thanks to our friends at Arc Pensions for the answer to this query. 

What if I want to reduce pension contributions to the statutory minimum?

TPR flags that employers need to consider employment contracts, trade union agreements and the provisions of DC schemes which may affect the employer’s ability to make a change. Again, this is consistent with our view that changes need to be properly documented in furlough agreements and the scheme rules need to be checked so any necessary amendments are made.

With thanks to our friends at Arc Pensions for the answer to this query. 

What about consultation with employees?

Normally, if an employer with more than 50 employees wants to reduce its DC contributions, it needs to consult with affected workers for 60 days. That is not practical in the current circumstances. TPR acknowledges this, although it wants employers to consult as much as possible. It will not take regulatory action if:

  • the employer has furloughed employees;
  • the reduction applies only to furloughed employees;
  • the reduction applies only during the furlough period;
  • and the employer writes to the furloughed employees clearly explaining the change and how it will work.

This concession applies until the end of June 2020 but will be kept under review.

In all other cases, TPR expects employers to comply with the consultation requirements.

With thanks to our friends at Arc Pensions for the answer to this query. 

 ​​​​​

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