Do we need to pay employees if they are absent from work?
If an employee is prevented from working because they are genuinely unwell or sick, then the company's normal sickness policy should apply.
If you have asked your workforce not to come to work but to work from home, they should also be paid as normal.
Where an individual is not unwell but is prevented from working because they are, for example, in self-isolation, quarantine, or stranded abroad, or they have otherwise been advised to stay at home as a result of medical or UK government advice and are unable to work remotely, there is no legal right to be paid for the time off. However, ACAS and the Secretary of State for Health have advised such absence to be treated as sick leave under the company’s sick pay policy.
Statutory sick pay (SSP) will be payable to eligible workers, although the UK government has announced a series of measures to relax the ordinary rules in light of the Covid-19 outbreak. New legislation has been passed allowing SSP to be paid from the first day of absence (instead of day four) in certain circumstances. For this to be the case, an employee must be unable to work either because they have Coronavirus or because they are self-isolating and:
they must be eligible for SSP
their first day of sickness absence must be on/after 13 March 2020
they must be off work for more than 4 consecutive days
As of 26 August 2020, the SSP rules have been amended to cover those self-isolating in advance of an operation. Workers who have been notified by a registered medical practitioner that they are to undergo a surgical or other hospital procedure, and have been advised to self-isolate in advance, are eligible for SSP for the period of self-isolation up to 14 days. Workers who are able to work from home while self-isolating in these circumstances are not entitled to SSP, but should be paid their normal wages.
The UK government also announced that Employment Support Allowance (ESA) will be available to the self-employed, and to workers whose earnings are too low to be eligible for SSP, if they are affected by Covid-19 or self-isolating due to UK government advice. ESA rules have also been relaxed so that payment is from day one of absence (instead of day eight), and to remove the need to attend a jobcentre to claim.
You may want to consider a temporary enhancement to the company sickness policy in order to incentivise people to remain off work, as insufficient sick pay provision risks individuals reporting for work. Any such changes should be kept under review and adapted as circumstances change.
What was the Coronavirus Statutory Sick Pay Rebate Scheme?
The Coronavirus Statutory Sick Pay Rebate Scheme enabled employers to reclaim SSP which they pay to current or former employees for periods of sickness starting on/after 13 March 2020. Employers were eligible for this scheme if they:
were claiming for an employee who was eligible for sick pay due to coronavirus on of before 30 September 2021
had a PAYE payroll scheme that was created and started on or before 28 February 2020
had fewer than 250 employees on 28 February 2020
Employees could be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts.
Where an employer pays more than the statutory rates of SSP (‘enhances’ or ‘contractual’ sick pay) they can only claim for the current rate amount.
Repayments under this scheme will cover up to two weeks of sickness, starting from the first day of sickness, provided that the employee was unable to work because they:
were isolating at home because they live with someone who was self-isolating due to having symptoms;
were advised by letter to shield because they’re clinically extremely vulnerable and at very high risk of severe illness from coronavirus;
were notified by the NHS to self-isolate before surgery for up to 14 days; or
were isolating at home because they were told by the NHS Test and Trace that they had been in contact with someone who has Coronavirus
Employees did not have to provide a doctor’s fit note for employers to make a claim. Employers should make sure to keep records of SSP payments for three years.
Due to the rising number of Coronavirus cases, the Coronavirus Statutory Sick Pay Rebate Scheme will be reintroduced from mid-January 2022. Further guidance is expected shortly.
Can I make staff redundant?
It may not always be appropriate to make staff redundant completely.
You may wish to adopt flexible measures instead, for example, short-time (a reduction in hours) and lay-off working. If you do need to make redundancies ensure to follow the correct procedure. For further information and to make redundancy letters, read Redundancies. Alternatively, Ask a lawyer for workforce reduction advice.
What does lay-off mean?
Lay-off is when an employer takes an employee off work and off pay for at least one working day. It is used as a response to lack of work, and as an alternative to making redundancies. For more information, read Lay-offs and short time working.
Check your employment contracts to see whether you are allowed to implement short-time and lay-off working. If they are currently not in the employment contract, you can get the employee's express consent to vary or change the contract to allow for lay-offs. You can use a Change to employment terms letter for this purpose. For further information read Changing employment terms.
There is a statutory scheme for lay-offs, but usually, a lay-off clause in the employment contract is required in order to implement this or with the consent of the employee.
How long can an employee be laid off for?
There’s no limit for how long an employee can be laid off or put on short-time. An employee could apply for voluntary redundancy and claim redundancy pay if it’s been:
- 4 weeks in a row
- 6 weeks in a 13-week period
What is the lay-off pay entitlement and short-time working payments?
Employees should get full pay unless the contract allows unpaid or reduced pay lay-offs.
If the lay-off is unpaid, employees are usually entitled to guarantee pay.
What is short-time working?
Short-time working is similar to lay-off, but rather than providing no work, the employer provides some, reduced, work. Less than half a normal week's work and pay will trigger the statutory short-time working protections for employees, subject to eligibility requirements.
A statutory 'guarantee payment' is payable to employees, subject to certain requirements. The maximum payment is £29 per day for up to five 'workless' days in any three-month period, so a total maximum of £145. Part-time payments are calculated pro-rata.
An employer could choose to pay more.
For further information read Lay-offs and short time working.
Can I make employees take annual leave?
You are entitled to give notice to staff to take annual leave, provided there is no agreement to the contrary (eg in the employment contract). Notice must be at least twice as long as the period of leave you require them to take, eg if you require an employee to take 1 week's annual leave, you must give them at least 2 weeks' advance notice.
Can I ask employees to volunteer for unpaid leave or redundancy?
If you wish for employees to take periods of unpaid leave, their consent is required unless their employment contract contains a clause allowing you to place them on unpaid leave.
While it is not always appropriate to make staff redundant completely, you may wish to seek out staff who are willing to take redundancy voluntarily.
You cannot just offer voluntary redundancy to age groups eligible for an early retirement package - this could constitute discrimination. However, an early retirement package (for certain age groups) could be one element of a voluntary redundancy offer open to all staff. For more information read Redundancy.
Can I reduce my employee's pay?
Employers will need to consult with staff to obtain their express agreement to these measures where the employment contract does not contain any relevant contractual flexibility clauses or short-time working clauses.
You can consider using a Change to employment terms letter to change an employee’s terms and conditions of employment (with their consent).
What was the Coronavirus Job Retention Scheme?
Under the Coronavirus Job Retention Scheme (CJRS), which ran from March 2020 to 30 September 2021, 'furloughed' employees were employees who would have otherwise been laid-off during the crisis. Under the CJRS, employers in the UK were able to access support to continue paying part of these employees' salaries, therefore, keeping them on the payroll and avoiding the need to make them redundant.
With the CJRS coming to an end on 30 September 2021, employers will need to consider:
recalling furloughed staff back to work on their agreed terms and conditions.
terminating furloughed staff’s employment, with normal redundancy rules continuing to apply.
coming to an agreement with staff about any changes to terms and conditions of employment. As the rules on changing employment terms and conditions continue to apply to furloughed staff.
Employers will need to consider the usual equality and discrimination laws when making decisions about how and when to end furlough arrangements.
Employers will need to make sure that any claims for furloughed staff in September are submitted by 14 October 2021 and any amendments made by 28 October 2021.
For further information read Furlough, workforce reduction and managing employees.
How can I recall a furloughed worker?
Since the Coronavirus Job Retention Scheme came to an end on 30 September 2021, you will need to determine how you wish to deal with staff that had been furloughed. If you wish to recall staff, you can use a Furlough letter for previously furloughed employees to inform a furloughed employee that they are to return to work. This letter informs a furloughed employee when their furlough period will come to an end and when they are expected to resume working.
You should provide a furloughed employee with ‘reasonable notice’ to return to work, to allow employees to make any necessary arrangements (eg child care arrangements).
What should furloughed employees be paid if they are then made redundant?
Furloughed employees who are then made redundant must receive statutory redundancy pay based on their normal wages rather than their furlough pay. This also applies to notice pay, which is where employees must be given a notice period before their employment ends.
Will workers on zero-hour contracts be paid if they are asked to self-isolate?
If a zero-hours worker earns over a certain average per week then they will be entitled to receive statutory sick pay (SSP) when told to self-isolate. Those zero-hours workers who currently do not meet the minimum earning requirements for SSP, will not be eligible for SSP unless further legislation is introduced unless the employer pays them voluntarily.
For further information on calculating SSP, read How to calculate statutory sick pay for zero-hours workers.
When will employees be paid statutory sick pay (SSP)?
Historically, SSP was not paid for the first three days of illness. The UK Government has passed new legislation allowing for SSP payment from day one of absence, for those unable to work as a result of being advised to self-isolate or because they have coronavirus. Additionally, in order for SSP to be payable from the first day of absence, employees:
- must be eligible for SSP
- their first day of sickness absence must have been on/after the 13 March 2020
- must be off work for more than 4 consecutive days
Are self-employed individuals entitled to sick pay?
Generally, employees are entitled to sick pay while self-employed individuals are not. This is because sick pay is paid by an employer. However, the Government intends to make it easier for self-employed individuals affected by Covid-19, to access benefits.
Those individuals on Employment and Support Allowance (ESA) who are suffering from Covid-19 or are required to self-isolate, will be able to claim the allowance from day one, instead of having to wait for seven days.
Further, the minimum income floor has been temporarily removed from Universal Credit for self-employed individuals who have to self-isolate as a result of coronavirus. The minimum income floor is an assumed level of income, which takes into account how much an individual would normally be expected to earn in a month when calculating their entitlement to Universal Credit. Not having this minimum income floor in place, means that self-employed individuals will be able to claim for the time they spend off work due to sickness.
Self-employed individuals in need of financial assistance will be able to apply for Universal Credit over the phone, without the need of attending a jobcentre.
Self-employed individuals who do not have enough money to live on while they wait for their first Universal Credit payment can ask for an advance payment. This can be done online or through their Jobcentre Plus work coach. To apply, individuals will need to:
explain why they need an advance
verify their identity (either when they apply online or during their first phone appointment with the work coach)
provide bank account details for the advance
For more guidance visit the Government website.
I’m struggling to meet my Self-Assessment payments on account. Is help available?
If you’re due to pay a self-assessment payment on account by 31 July 2020 but won't be able to make the payment by that date due to Covid-19, then you may defer payment until January 2021. As of 24 September, this period has been extended by the Government. Those due to pay up to £30,000 in tax by 31 January 2021 will be able to use HMRC's 'Time to Pay' service to pay over an additional 12 months, meaning they won't need to pay in full until January 2022.
To defer these payments, you don't need to make an application.
During the deferral period, you can set up a budget payment plan to help you pay the deferred payment on account when it comes due. You can set up a payment plan by either setting one up online (via the GOV.UK website) or calling the Payment Support Service on 0300 200 3835 (Monday to Friday, 8am to 4pm).