In response to the increasing challenge of Coronavirus and in light of rapidly evolving advice, Tozers has taken steps to ensure that we continue to provide you with our usual client service whilst also maintaining the safety of our clients and colleagues. Please see our full update here.

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Insights

Current position on recent and upcoming changes regarding coronavirus

Posted on 23rd March 2020 in Employment, Coronavirus Pandemic

Posted by

Stephen Jennings

Partner and Solicitor
Current position on recent and upcoming changes regarding coronavirus

Statutory sick pay

There have been so many changes it can be easy to get confused. Here is the current position on recent and upcoming changes at the time of writing:

  1. Statutory sick pay is to be payable from day 1 of sickness absence for eligible employees.
  2. Statutory sick pay is now payable not just for those employees who are sick but also for those who are self-isolating. ACAS has published a useful summary of the current rules around self-isolation and eligibility which can be found here.

It is not clear whether statutory sick pay is payable to vulnerable employees who don’t fall within the self-isolation rules but who choose to social distance by staying at home and who can’t work as a consequence. ACAS guidance suggests not, although the wording of the legislation refers to people isolating themselves “to prevent infection or contamination with coronavirus, in accordance with guidance published by Public Health England”. As Public Health England guidance (here) strongly advises social distancing for certain vulnerable employees (those who are pregnant, over 70 or have certain underlying health conditions), if this means such an employee can’t work then SSP could be payable. No doubt this point will be clarified in due course.

  1. 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. Do ensure your sickness recording processes distinguish between absences related to COVID-19 and absences for other reasons.
  2. The government has now introduced a new system of isolation notes which employees can use to provide evidence to their employers that they have had to self-isolate due to COVID-19, either because they have symptoms, or because they live with someone who has symptoms. Employees can apply for notes here.  

Reduction of staff costs

I ran through some key options in my update from Tuesday but the key new development is the Chancellor’s announcement of a Coronavirus Job Retention Scheme. Details are as yet unclear so the summary that follows is subject to change.

The idea is to encourage employers to keep employees on, rather than make them redundant. The employer can claim a grant of up to 80% of an employee’s wage, up to a cap of £2,500 per month. To be eligible, an employee will need to be classified as a “furloughed worker”. It is not clear what this means precisely as “furlough” is not a term currently defined in employment law. The fact that the scheme applies from 1 March implies that some existing measures will qualify (i.e. this is not an entirely new category of employment), although you will need to look closely at how this is defined once details are published to ensure staff come within this.

As current guidance says that employees should not undertake any work for the employer while furloughed, in practice it is likely to apply to employees who have been sent home under a contractual right to be reduced to zero hours, plus employees who agree to stay at home on this basis. If the alternative is redundancy, many employees (especially those with low or no redundancy payments) are likely to agree. As employees cannot undertake any work whilst furloughed, it seems you will not be able to e.g. furlough an employee for 4 days/week and have them work on the 5th. This may mean you having to choose which employees to keep at work and which to send home (as opposed to reducing all of their hours to keep them all doing something).

Employers will need to submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required). The timing of payment by HMRC remains unclear and employers will therefore have to keep a close eye on cash flow.

Employees will remain employed while furloughed. Employees can pay employees more than the 80% rate if they choose without losing eligibility.

IR35

Perhaps not surprisingly no-one has asked us about this and it is not top of people’s agendas but, for those who haven’t heard, implementation of the new IR35 rules has been pushed back a year (to next April).

As always, do ask if you need specific advice or would like to work through a particular scenario with us.

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