Coronavirus Outbreak Q&A

We're getting lots of questions from employers about how they should handle HR issues around Coronavirus. It's a fast-developing situation, and government guidance is updated daily, but here are our answers to the most common questions. 

Additionally we're offering free access to MentorLive, an online compliance management system full of information, templates and guidance on how to mitigate the impact of Coronavirus on your people and your business. 

What is the Coronavirus Job Retention Scheme?

The Coronavirus Job Retention Scheme was announced on Friday 20th March. 

It will reimburse employers up to 80% of wages for employees they have to lay off temporarily or make redundant due to the business conditions caused by the coronavirus.

The maximum wages covered by the scheme are £2,500 per month. The government rebate will cover employers' NICs and minimum pension contributions in addition to this.

What businesses can apply?

Almost all businesses can apply. The scheme will be particularly relevant to businesses in the sectors ordered to close (principally retail, hospitality and leisure), but can apply in any sector.

Public sector organisations and businesses that receive public funding for staff costs are unlikely to be eligible.

Is it effective immediately?

Yes, and it's also backdated to 1st March.  This means that it can cover employees a business has temporarily laid off or made redundant since 1st March - if those people are re-hired by the business.

Are any employees excluded?

You can only claim for employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.

Does it apply to employees on zero hours' contracts?

Yes. Their earnings are based on average earnings (see “how is pay calculated” below).

Are workers eligible?

Yes - the option to furlough applies to any type of contract, including a zero-hours or temporary contract - as long as the person was on the employer's PAYE payroll on 19 March 2020.    

Can employees who I have made redundant benefit?

Yes. If an employee was made redundant between 28 February 2020 and 19 March 2020, they can be re-hired and immediately placed on furlough. This applies even if you do not re-employ them until after 19 March.

Will they have to pay back their redundancy pay?

If the person is re-hired and this is backdated to the day after they left the business, it seems fair that they should be asked to repay their redundancy pay. The government has given no details of whether this is required or how this is expected to work in practice. 

These employees would qualify for redundancy pay again if they were to be made redundant in the future and continuous employment rules would mean this would be calculated on their full length of service (not just from the time they were re-engaged) - so it seems only fair that they should repay any redundancy money they have already been paid.   

How will employees receive their money?

They will receive wages through employers' normal payroll arrangements, subject to the usual deductions. The employer is reimbursed via HMRC.

How quickly will grants be available?

The online service became available on 20th April 2020. HMRC has suggested that payments will normally be made within 4 to 6 working days from when the claim is made on the online portal.  

How can we afford to pay our people in the meantime?

The government has made clear that the intention of the scheme is to save jobs and ensure employees retain an income. Zero interest loans are available through the Business Interruption Loan Scheme. VAT has also been deferred and grants are available for certain sectors, which should help with cashflow.

Do I just pay employees 80% of their normal pay?

Even though the government will only reimburse 80% of an employee's wages, it is important to note that the employer is still liable for 100% of wages unless the contract of employment allows for this to be varied. Although the government guidance states 'you can choose to top up your employees' wages, but you do not have to', a reduction in pay cannot be imposed. An employer cannot amend terms of a contract of employment, including pay, without the employee's agreement. 

If an employer cannot afford to make up the difference it may be possible to renegotiate the employment contract to allow for a temporary reduction of pay to 80% during the furlough period. This agreement should be confirmed in writing, specifying the period in which the reduction in pay will be applicable.  

How is pay calculated?

For employees with a salary or regular pay, it's based on gross salary in their last pay period prior to 19th March.

*If, based on previous guidance, you have calculated your claim based on the employee's salary as at 28 February 2020 (and this differs from their salary in their last pay period prior to 19 March 2020) you can choose to still use this calculation for your first claim.

For employees on variable pay or zero hours contracts, it's based on the greater of:

•             The same month's pay from last year; or
•             Average monthly earnings from the 2019-2020 tax year.

Does the 80% grant cover commission and bonus payments? 

Government guidance was updated on 4th April to state that discretionary bonus, commission and non-cash payments are excluded.

However, the claim can include “any regular payments you are obliged to pay your employees”. The guidance states that this includes “past overtime”, fees and compulsory commission payments. It is not clear what “past overtime” means and we will seek further clarification.

Does the employer still have to pay commission and bonuses to employees?

Bonuses and commission payments that were earned prior to the furlough period commencing might then become payable during the furlough period. As this is a contractual payment, the employer would still have to pay this in addition to the agreed wages to be paid during the furlough period, and not expect to claim the bonus or commission payments back.

How do I calculate the 80% of wages for employees who work variable hours?

For employees whose pay varies, the employer can claim for the higher of (i) the same month's earning from the previous year (eg earnings from March 2019); or (ii) average monthly earnings in the 2019-20 tax year. 

How is pay calculated for employees who have been on statutory leave prior to furlough?

Statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, sick leave and parental bereavement leave.

Claims for full or part time employees returning from statutory leave after 28 February 2020 should be calculated against their salary, before tax, not the pay they received whilst on statutory leave.

What if 80% of pay takes pay below the National Minimum Wage / National Living Wage?

The government has confirmed that the NMW / NLW does not apply to furloughed workers.

There is some work to do and I would like to rotate it among the workforce - can I do this?

The minimum period of furlough is three weeks and furloughed workers must not do any paid work for you during that time. But they can go back onto their normal terms after that, and then be re-furloughed at a later date.

So you can rotate work and furlough leave among your workforce but it will take careful planning.

Does it apply to employees who are taking leave due to school closures?

Yes. Updated guidance issued on 4th April states that “employees who are unable to work because they have caring responsibilities” can be furloughed.

What about employees who have been laid off but have now found other employment?

If they were employed with your business on 28th February but resigned prior to 19 March 2020, these employees can be furloughed if they are re-employed by your business. However, you are not obliged to re-employ them.  

Does the scheme apply to vulnerable workers who are following government advice to self-isolate at home?

Yes. Currently “extremely vulnerable” people have been told to “shield” at home - these employees should be placed on furlough.  

Are employers still required to pay NIC and pension contributions? Will this be covered by the JRS grant?

Employers will receive a grant from HMRC to cover the lower of 80% of an employee's regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage.    

Is there a qualifying length of service to be eligible for the scheme?

No. But to be eligible, the employee must have been on the payroll on 19 March 2020.  If they were hired later, they are not eligible.  Anybody who was on the payroll on 28 Feb and has since been made redundant can be rehired and put on the scheme.  

Can I furlough employees who are self-isolating and receiving sick pay?

An employee cannot receive SSP and be furloughed at the same time. It is one or the other.  Government guidance confirms that once the self-isolation period has ended (which will usually be either 7 or 14 days), that an employee can then be furloughed.  

The scheme is not intended for short-term absences due to sickness, and therefore self-isolation should not be a consideration in deciding whether to furlough an employee.

However, employees having to stay at home for 12 weeks (which is referred to as 'shielding') will be entitled to join the furlough scheme.  

Can employees who are on Long Term Sickness absence be furloughed?

Employers can decide whether to furlough these employees or not. Employees cannot be receiving SSP and furlough pay at the same time, it can only be one or the other. With the employee's agreement, an employer can stop paying any continuing SSP entitlement and instead put the employee on furlough and pay an agreed rate, which should be at least 80% of normal pay.

What if an employee becomes unwell during a furlough period?

An employee cannot receive SSP and be furloughed at the same time. The employer can choose to end the furlough period and revert to paying SSP if an employee becomes unwell whilst furloughed.  However, there is no obligation to do so and the employer could instead opt for the employee to remain furloughed and continue to pay the employee the agreed furlough rate of pay.  

Please note that if an employer decides to move the employee on to SSP that they will no longer be able to claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to two weeks of SSP. It is not possible for employers to claim monies back from both the Job Retention Scheme and the SSP rebate scheme for the same employee for the same period of time.

If an employee is entitled to full Company Sick Pay and meets the relevant criteria, this should be paid at full rate. It is likely that a furlough grant can be reclaimed via the CJRS as is the case for other enhanced payments. Alternatively, the employer could enquire if the employee would prefer to remain on furlough during this time, which would therefore not affect their sick pay entitlement. 

Can an employee still take annual leave during a furlough period? And can employee be forced to take annual leave during the same period?  And if so, will the employer still be able to claim back 80% of normal salary?

Government guidance has confirmed that employees can take annual leave during furlough. If an employer wants to require employees to take annual leave during a furlough period, they can do so, provided that the employer gives the required notice. Government guidance published on 13 May 2020 states that 'the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday'.

The employee should be paid normal salary for holidays taken during the furlough period. The furlough grant will only cover 80% of normal salary and employers will be obliged to fund the additional payment. 

What if employees have been unable to take their full annual leave entitlement by the end of the year?

On 27th March the Government amended the Working Time Regulation to allow carry forward of up to four weeks accrued holiday leave. This will allow leave to be taken sometime in the following two years but only where the holiday leave was not taken in this current holiday year as a result of the effects of coronavirus on the worker, the employer or the wider economy or society.

Can employees whose salaries are funded by public bodies be furloughed?

Where employers receive public funding for staff costs, and that funding is continuing, the government expects employers to use that money to continue to pay staff rather than furloughing them. This also applies to non-public sector employers who receive public funding for staff costs.

Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.

Can I make redundancies whilst employees are furloughed?

Yes.  Although the purpose of the scheme is to avoid redundancies, this might be unavoidable for some businesses and there is no rule to say an employer cannot carry out redundancies whilst employees are also furloughed.   

Please note - if an employer is proposing to dismiss 20 or more employees within a 90 day period - collective redundancy consultation obligations will apply.  This includes having to consult for a minimum of 30 days (or 45 days if dismissing 100 or more employees) and to elect appropriate employee representatives or consult with any recognised trade union. 

Employers should take advice before seeking to carry out redundancies.

Do I need to get consent from employees to join the furlough scheme?

Yes. Changing an employee's status to 'furloughed' would constitute a change to terms and conditions and therefore agreement would need to be reached.

It is important employees are provided with necessary information to decide if they wish to join the scheme - this will be especially important if an employer intends negotiating a reduction in pay (e.g. 80% of basic salary) during the furlough period.  

If an employer wishes to impose the furlough scheme onto employees then further advice should be taken.  It is important to be aware that collective redundancy consultation obligations could also be triggered for any employer intending to force changes to an employee's terms and conditions, and where this affects 20 or more employees.  

Do I need to keep any evidence that employees agreed to be furloughed?

Once the employee has agreed to be furloughed, employers should send a furlough confirmation letter to the employee (this can also be emailed).

This letter should confirm that agreement has been reached and outline the specific terms, for example:

  • date of the change to furlough status
  • how long the furlough period will last (or approximate period if unsure)
  • what the payment arrangements are

 A record of this communication must be kept for 5 years.

What should I do if the Job Retention Scheme ends but there is insufficient work available for employees?

When the Job Retention Scheme comes to an end, employers will need to assess their circumstances and decide whether or not employees are able to return to their duties. If not, it may be necessary to consider making redundancies.   

Please seek legal advice if you find yourself in this situation.

Can I claim for employees who transferred from another business?

Employees of a business which transferred after 28th February 2020 are eligible for the scheme, if either the TUPE or PAYE business succession rules apply.   

Where can I find further information?

Further details of all the support available to businesses are here.

Who qualifies as a “key worker”?

The government has published a list of key worker job roles. This applies to England and the position in Scotland and Wales may differ. Details are here.

The aim is that key workers will be able to continue to send their children to school and so should not require them to stay away from work for childcare.

What evidence of sickness does an employee need to give?

An employee may self-certify as sick for the first seven days of sickness.

After seven days, for sickness due to coronavirus, employees may use a new, online service to obtain an electronic “coronavirus isolation note” which they can email to their employer. This acts like a “fit note”.

The “coronavirus isolation note” can also be used by an employee who has been advised to self-isolate due to a member of their household having coronavirus symptoms.

What health & safety duties do I have as an employer?

Employers have a duty to ensure the health, safety and welfare of their staff, so far as is reasonably practicable. Pregnant workers and those with disabilities have particular protection.

Potential exposure to coronavirus is clearly a risk which employers must take into account and this would particularly apply when dealing with a worker with an existing medical condition. 

Our advice is to take a risk-based approach, Areas you might consider include:

  • Identify any workers with particular vulnerabilities (in particular those with pre-existing respiratory conditions); these people might need special protection.  
  • Identify any workers who have recently returned from, or who are about to return from, any of the areas listed in the government guidance. These workers might need to be kept away from the workplace, at least until they have received advice from NHS 111.  
  • Consider government guidance.  
  • Consider what the work involves. If the work involves close personal contact with other people, there will be a higher risk of transmitting the virus than if it involves working alone, so you might take a more cautious approach.    

Should I pay a worker who is in quarantine / self-isolation?

From 13th March SSP is payable from the first day an employee self-isolates, for the full period of time off, if the employee is advised to self-isolate by following government guidance.  This includes those advised to self-isolate because someone in their household has symptoms.

There is now an online “isolation note” scheme which allows employees to provide the appropriate evidence electronically.

It may be possible for workers who are self-isolating as a precaution to work from home and receive their normal pay. 

What if an employee is ill with coronavirus?

On 11th March, the Chancellor announced that Statutory Sick Pay (SSP) is now payable from the first day of sickness absence. The government will refund the cost of up to 14 days' SSP for each employee off sick due to coronavirus to SMEs with up to 250 employees.

It will also be possible for an employee to obtain a sickness certification note from NHS111 - although it may not be possible for the employee to file a Fit Note within the usual time frames. 

The local public health authority may be contacting you and you may need to pass on information about people the employee has been in contact with.

How do we communicate to members of the public, contractors, visitors etc that if they're experiencing any symptoms or have returned from any specified locations - they should not be entering the premises?

The NHS has produced a poster that you can display in your premises to remind people of their responsibilities.

Are my current control measures enough?

You are required under the Management of Health and Safety at Work Regulations 1999 to conduct suitable and sufficient risk assessments covering risk to employees who are at work and also risks to non-employees arising from your operations. These risks then must be planned, organised, controlled, monitored and reviewed. For those with more than 5 employees, these should be written, recorded and communicated. If you already have risk assessments in place, these should be reviewed in light of this new risk and suitable control measures implemented, dependent on your industry. 

From what is known of the virus, it is most likely to happen when there is close contact (within 2 metres or less) with an infected person with the risk increasing the longer someone has close contact with an infected person. As such, you may want to consider, limiting numbers of people at gatherings / meeting, “social distancing” and policies such as “no shaking hands”. You may also wish to more stringent controls on any activities which require sharing of equipment such as phones, keyboards, hot desking etc. 

I have the NHS poster displayed in my premises, is there anything else I should do?

This should be reviewed as part of your risk assessment. However, you may want to consider introducing a 'no shaking hands policy' and have hand sanitiser readily available throughout the building. It may be good practice at this time to ensure that you have a list of all visitors, contractors or temporary staff working on your site, and their contact details in order that you can notify them if any staff or visitors on your premises has been tested positive of the virus. These records must be stored in line with GDPR regulations.  

Do we need policies and procedures?

You may wish to create a policy or procedure to help address the actions to be taken should a member of the team, visitor etc. begin showing symptoms or potentially be diagnosed as suffering with Coronavirus. These actions may include allowing certain team members at risk to work from home, providing appropriate additional PPE/RPE on top of your standard provisions, creating a process for deep cleaning and sanitising your property surfaces and equipment following any confirmed cases and closing the business temporarily while this takes place. 

Should I issue my staff with masks?

The HSE have advised as follows:

Employees are not recommended to wear facemasks (also known as surgical masks or respirators) to protect against the virus. Facemasks are only recommended to be worn by symptomatic individuals (advised by a healthcare worker) to reduce the risk of transmitting the infection to other people.

PHE and PHA recommend that the best way to reduce any risk of infection is good hygiene and avoiding direct or close contact (closer than 2 metres) with any potentially infected person.  

My staff are high risk, should I issue PPE / RPE?

This should be considered as part of your Risk Assessment for the tasks / activity they are undertaking. The Government has issued this guidance.

A member of staff has tested positive, do I need to notify anyone?

The government reclassified Covid- 19 as a notifiable disease and must be notified to the Public Health England. This will be completed by the GP. 

Someone who has attended my premises has suspected COVID- 19. Should I close?

The majority of tests return negative, no action is required until the outcome of the tests are known.

Should someone test positive then: The management team of the office or workplace will be contacted by the PHA local Health Protection Team to discuss the case, identify people who have been in contact with them and advise on any actions or precautions that should be taken.

Advice on cleaning of communal areas such as offices or toilets will be given by the local Health Protection Team at PHA and is outlined later in this document.” HSE. 

How can you protect yourselves from blame if you get it wrong?

Some decisions will be very difficult over the coming weeks and months, with potential life and death consequences if you get them wrong. You will be balancing these also against the disruption to business and commercial consequences of taking an approach that is too cautious.

Bear in mind the general principle in health and safety law, that if you can't do an operation safely, you should not do it at all. However, as a pandemic develops, this general principle will be tested probably to destruction in many cases.

If your business operations have wider health and safety critical implications, you may have to balance the safety of your staff against public safety (for example, if your operation is necessary for the supply of utilities, food, medicines, healthcare and communications).

To take an extreme example, imagine a health and safety risk assessment before sending your workers in to Chernobyl to fight the fire?

What if you get it wrong and hindsight is used to accuse you or your organisation of exposing people to unnecessary risks? In these cases, it will be invaluable to be able to point to a written risk assessment or similar document, showing that you have grappled with the issues and sought to balance them, taking into account factors on both sides before reaching a difficult decision that you will keep under review. Quite rightly, it will be harder to blame you in criminal law if you have conducted a balancing exercise and sought to achieve what is reasonably practicable, even if hindsight suggests otherwise.

Specialist health and safety legal advice can help you through the exercise, with the added bonus that in appropriate cases your draft plans, risk assessments and documents can be protected from ever needing to be disclosed by invoking the principle of legal privilege.

 

How Mentor could help

If you are an existing Mentor customer, you can visit MentorLive where we will host a range of tools, templates and guidance to help you identify key priorities and take specific actions to mitigate the impact of COVID-19 on your people and your business. We will be regularly adding materials to MentorLive so please be sure to keep visiting.   

If you are not an existing Mentor customer and would like to talk about how we could help you and your business call us today on 0800 074 8151. Customers with hearing and speech impairments can contact us on Next Generation Text Service (NGTS) 18001.  Please note that Mentor's services incur a cost.