Advice for employers
Well what a week. Everyone was preparing for the change effective 1st November from the Coronavirus Job Retention Scheme (CJRS2) to either of the two Job Support Schemes (Open or Closed). However, the Prime Minister Boris Johnson announced on Saturday 31st October 2020 that the country was to again go into a nationwide LOCKDOWN. Note this applies to England only as the devolved Governments are operating their own schemes.
The below guidance is the most up to date that we have but this may change. In addition, a vote is required in the House of Commons on Wednesday for these measures to come into force (although it is expected that this will happen).
What does this mean?
Working from home
A list of businesses that are required to close during this current lockdown is given below. Please note that if you are NOT required to close then the following applies:
- If your employees CAN work from home, then they should do so
- If your business requires your employees to attend work for you to continue to function (and you are not one of those required to close), then they need to come to work
- In such cases you MUST ensure you have appropriate COVID measures in place
Stay at home
The UK Government wants to minimise social contact as much as possible because it is clear that the transmission of the virus is as a result of people mixing with others. To reduce the “R” number (the rate of infection) then we must wherever possible stay at home. Where we cannot then we should apply effective COVID measures such as washing hands, wearing a facemask and maintaining 2 metres social distance from others.
There are some specific reasons you may leave your home as below:
- for childcare or education, where this is not provided online
- for work purposes, where your place of work remains open and where you cannot work from home (including if your job involves working in other people’s homes)
- to exercise outdoors or visit an outdoor public place – with the people you live with, with your support bubble or, when on your own, with ONE person from another household
- for any medical concerns, reasons, appointments and emergencies, or to avoid or escape risk of injury or harm – such as domestic abuse
- shopping for basic necessities, for example food and medicine, which should be as infrequent as possible
- to visit members of your support bubble or provide care for vulnerable people, or as a volunteer
This list is not exhaustive and there are other limited circumstances where you may be permitted to leave or be outside of your home. These will be set out in law and further detailed guidance will be provided.
Please note if you are unable to justify why you are not staying at home you may be liable for fines.
Businesses required to close
The below list has been published of businesses that are required to close in law. Breaches of this will result in fines, so please check you are one of those affected:
- Clothing and electronic stores
- Vehicle showrooms
- Travel agents
- Betting shops
- Auction houses
- Car washes
- Tobacco and vape shops
- Bowling alleys
- Leisure centres and gyms
- Sports facilities including swimming pools
- Golf courses and driving ranges
- Dance studios
- Stables and riding centres
- Soft play facilities
- Climbing walls and climbing centres
- Archery and shooting ranges
- Water and theme parks
- Concert halls
- Museums and galleries
- Adult gaming centres and arcades
- Bingo halls
- Concert halls
- Zoos and other animal attractions
- Botanical gardens
- Hair, beauty and nail salons
- Tattoo parlours
- Massage parlours
- Body and skin piercing services
- Non-medical acupuncture
- Tanning salons
In addition, restaurants, pubs and bars must close, but can provide takeaway and delivery services – though the takeaway of alcohol will not be allowed. Hotels, hostels and accommodation should only open for those who have to travel for work purposes.
- Note however that food shops, supermarkets, garden centres and certain other retailers providing essential goods and services can remain open
- Non-essential retail can remain open for delivery to customers and click and collect
There are further restrictions in respect travel and in essence you should avoid all non-essential travel by private or public transport. Essential travel includes, but is not limited to:
- essential shopping
- travelling to work where your workplace is open AND you cannot work from home
- travelling to education and for caring responsibilities
- hospital GP and other medical appointments or visits where you have had an accident or are concerned about your health
If you need to travel you should seek to minimise the number of journeys you make. You should walk or cycle if possible and plan ahead to avoid busy times and routes on public transport. This will allow you to practise social distancing while you travel.
- Overnight stays and holidays away from primary residences will NOT be allowed
- Including ANY holidays in the UK and abroad
- This includes staying in a second home, if you own one, or staying with anyone you do not live with or are in a support bubble with. There are specific exceptions, for example if you need to stay away from home (including in a second home) for work purposes
The Coronavirus Job Retention Scheme has been extended – initially for 1 month, although indications are this could be for longer if the ‘R” rate and the number of Coronavirus cases does not drop significantly. The CJRS2 will:
- Operate as previously where claims can be made upfront to cover wages costs – however please note that the HMRC Portal needs updating so may not operate immediately and wages will be made in arrears until this is working
- HMRC grants will be available for 80% of the wages of employees (up to £2,500 per month) without the employer having to pay anything towards this except for National Insurance and Pension Contributions
- As under the current CJRS2, flexible furloughing will be allowed in addition to full-furlough
- the previous rules around part-work/part-furlough apply
- any shift patterns
- pay employees 100% for hours worked and claim furlough for periods of non-work
- The Job Support Scheme (JSS) will be introduced following the end of the CJRS2
- To be eligible for the CJRS2 extension
- Employees must be on an employer’s PAYE payroll via Real Time Information (RTI) on or before 30th October 2020, which means a submission notifying payment for that employee to HMRC must have been made by then
- Employers and Employees do not need to have been registered for any previous CJRS
- You are required to pay ALL monies received in grants from HMRC to your employees
- You may also continue to top up pay if you choose to do so
Letters are required and some are attached to the bottom of this post.
Pay reference period
As previously there are criteria for the calculation of the normal pay for employees based on their Pay Reference Period.
- For salaried and fixed hours workers then use the greater of:
- their normal pay in the last pay period prior to 19th March 2020, or
- the corresponding calendar period in the tax year 2019 to 2020
- With variable hours workers then you should use the greater of:
- the average hours worked in the tax year 2019 to 2020 (over the previous 52 weeks where they carried out work – not may go to 104 weeks if gaps)
- the corresponding calendar period in the tax year 2019 to 2020
With new employees to the scheme where they have not been on the CJRS1 or CJRS2 previously, then calculate their average earnings as normal.
Payment claims: The extended Coronavirus Job Retention Scheme will operate as the previous Scheme did, with businesses being able to claim either shortly before, during or after running payroll. Claims can be made from next week (exact day TBC) and as previously, paid within 6 working days.
Job Support Scheme postponed
The JSS is now postponed and will activate as previously advised once the extended CJRS closes.
Many businesses may have carried out redundancies or may be considering these. Under the CJRS, you are not obligated to provide a job for an employee coming off furlough, however, ensure that you continue to follow the correct employment procedures and have a justified reason for the redundancy. If you have made employees redundant effective 31st October 2020, you should consider whether rescinding the redundancy and placing them back on furlough is appropriate. The below notes are things you may wish to consider but strongly recommend that if you need support with this to call us as the specifics of each situation will vary.
If you have carried out redundancies did you consider that role was genuinely redundant i.e. what were your grounds for redundancy (Economic, Technological or Organisational) and based on the fact that you were unable to maintain your workforce post-31st October 2020. You must now review whether this still applies given the change in the CJRS/JSS:
- Under the incoming JSS, this would have allowed you to pay employees at least 73% of pay provided they worked at least 20% of their normal hours, so some additional cost to the business, but may have meant that you did not need to make redundancies
- If you did not have at least 20% of hours for them to work, then they would NOT have been eligible for the JSS and so this may have been a justifiable reason for the redundancy
- This has potentially changed given that the extended CJRS now allows you to pay the employee 80% of their pay and not have to make any contribution (other than National Insurance and Pension) which is a more favourable position for the employer financially, so was the reason based on some other substantial factor?
The decision must be yours as the employer so consider if rescinding the redundancy temporarily retains your employees in work (on furlough) for at least another month. If so, does this mean that they will still be made redundant at the end of the extended CJRS or will the situation in your company have changed sufficiently to rescind the redundancy in its entirety.
There are a few things to also consider:
- You can re-run your payroll and change the payments you have made and adjust the P45 that may have been issued
- If you rescind the redundancy and have already paid the Statutory Redundancy Pay (and other monies) then you may need to make pay adjustments accordingly
- If the employee does not wish to return to work then you will need to demonstrate your right to rescind the redundancy, especially given the outcome may not change when the extended CJRS ends
- You will be effectively claiming grant money from HMRC to pay the employees, when the redundancy is genuine and will still go ahead, which is a moral dilemma even when as now, it appears allowable (unless we receive additional guidance at a later date to the contrary)
It is recommended that you speak with your employees and discuss the situation with them.
Note: Govt update on evening of 2nd Nov 2020. Any employees employed at 23rd September (day when the JSS was announced) and notified to HMRC by RTI on or before that date who have since been made redundant can be rehired and put on the extended furlough scheme.
Employees who are either “clinically vulnerable” or “extremely critically vulnerable” have NOT been required to “shield” as previously. This means they are NOT eligible for furlough but may be eligible if self-isolating to Statutory Sick Pay (SSP) in accordance with NHS and Public Health England guidelines.
Anyone considered in either of the above categories has been told to take “extra measures” by minimising contact with others and to work from home if at all possible. However, this also means that if they cannot effectively work from home then they should travel to work and apply the appropriate COVID measures to minimise their risks.
Today the government also announced that they will provide additional funding to local authorities to support Clinically Extremely Vulnerable people. Over £32 million is being given to local authorities to enable them to provide support to Clinically Extremely Vulnerable people who need it, including helping people to access food and meeting other support needs to enable them to stay at home as much as possible for the 28 day period that the restrictive advice is in force. Funding is weighted by the number of those Clinically Extremely Vulnerable who live within the local authority boundaries.
The UK Government has ensured that any business in England forced to close under the current measures will be eligible for additional grants as follows:
- For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
- For properties with a rateable value of between £15k-£51k grants to be £2000 per month, or £1000 per two weeks;
- For properties with a rateable value of £51k or over grants to be £3000 per month, or £1500 per two weeks.
Loan guarantee schemes
Today the government announced they plan to extend the application deadline for loan guarantee schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme – to the end of January 2021. This will give businesses two extra months to make loan applications (relative to the current deadline of 30 November).
They will adjust the Bounce Back Loan Scheme rules to allow those businesses who have borrowed less than their maximum (i.e. less than 25% of their turnover) to top-up their existing loan. Businesses will be able to take-up this option from next week; they can make use of this option once. They understand that some businesses didn’t anticipate the disruption to their business from the pandemic would go on for this long; this will ensure that they are able to benefit from the loan scheme as intended.
This advice is being reviewed and updated regularly and is currently in line with HMRC, UK Government and ACAS guidance as updated 2nd November 2020.
Should you require any further advice or guidance please call us on our usual HR number of 0191 2058020 or send us an email.