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 sick pay and 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. The UK government announced its intention to introduce emergency legislation to provide for payment from day one of absence (instead of day four) for those unable to work as a result of being advised to self-isolate, or where they are caring for someone with COVID-19 symptoms who has been told to self-isolate.
Small employers (those with under 250 employees) will be able to recover SSP from the UK government for up to 14 days per person.
The UK government also announced that Employment Support Allowance (ESA) would 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 will also be 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 company sick pay policies 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.
Can I make staff redundant?
It may not always be appropriate to make staff redundant completely.
You may wish to adopt flexible measures instead in the meantime, for example short-time (a reduction in hours) and lay-off working.
What is lay-off and short-term working?
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. 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-off and short-time working, but a lay-off clause in the employment contract is required in order to implement this usually or with the consent of the employee. Speak with a lawyer for workforce reduction advice.
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.
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.
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.
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.
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.
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 for this purpose. For further information read Changing employment terms.
You should note that there are current proposals by the government to support employees by providing an emergency wage package rescue plan called the Coronavirus Job Retention Scheme.
Can I ask employees to temporarily leave their employment?
To minimise the need for redundancies, you could ask your employees to 'furlough' their employment (i.e. take a leave of absence).
This means that you won't be providing such employees with work, but can continue to pay them through the Coronavirus Job Retention Scheme. This ensures employees are kept on the payroll and not laid-off.
'Furloughed' employees are employees who would have otherwise been laid-off during the crisis. Under the Coronavirus Job Retention Scheme, all employers in the UK will be 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.
Who is covered by the Coronavirus Job Retention Scheme?
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Staff paid through the PAYE system.
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Zero hour workers who are paid through the payroll are presumably included in the Scheme, although how an employer will work out 80% of normal pay will need to be addressed in further guidance.
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Those who are self-employed will not be covered by the Scheme*.
*Currently, self-employed persons will be eligible for benefits paid at the same rate as statutory sick pay (£94.25 a week), however, the Government is looking to introduce a rescue package to help those affected by the coronavirus (COVID-19) outbreak.
How does the Coronavirus Job Retention Scheme work?
You can claim a grant of up to 80% of a 'furloughed' employee's salary up to a cap of £2,500 a month.
How can you access the Coronavirus Job Retention Scheme?
1. Designate affected employees as ‘furloughed'.
Employees who cannot work from home and who currently have no work to do will be obvious candidates for furloughing. Otherwise, you may need to consider a process of calling for volunteers, pooling and selection (as with a redundancy process). There is a risk of claims (eg discrimination claims) if the process is not handled correctly.
2. Notify 'furloughed' employees by using a change to employment terms letter.
3. Submit details about which employees have been 'furloughed' and their earnings to HMRC through a new online portal.
What is the Coronavirus Job Retention Scheme?
This scheme is to help employers pay employee wages. Employers will be able to contact HMRC to cover 80% of retained workers salary up to a maximum of £2,500 a month. This prevents employees being laid off during this time. The scheme will cover the costs of wages backdated to 1st March 2020 and be open for three months. The first grants should be available shortly.
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.
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 now announced its intention to introduce emergency 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 where they are caring for someone with Covid-19 symptoms who has been told to self-isolate.
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 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.