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
Small employers (those with under 250 employees) can recover SSP from the UK government for up to 14 days per person under the Coronavirus Statutory Sick Pay Rebate Scheme.
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 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 is the Coronavirus Statutory Sick Pay Rebate Scheme?
The Coronavirus Statutory Sick Pay Rebate Scheme enables employers to reclaim SSP which they pay to current or former employees for periods of sickness starting on/after 13 March 2020. Employers are eligible for this scheme if they:
are claiming for an employee who’s eligible for sick pay due to coronavirus
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 can 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 have Coronavirus;
they are shielding at home;
they are isolating at home because they live with someone who is self-isolating due to having symptoms;
they self-isolate because they are in a 'bubble' with someone in a linked or extended household that has Coronavirus symptoms; or
they are isolating at home because they have been told by the NHS Test and Trace that they have been in contact with someone who has Coronavirus
Employees do not have to provide a doctor’s fit note for employers to make a claim.
Please note that where an employee is self-isolating because of being in a 'bubble' with someone who has Coronavirus symptoms, SSP will cease to be payable if the person with symptoms tests negative for Coronavirus.
The online service through which to reclaim SSP is now available on the government website.
Employers should make sure to keep records of SSP payments for three years.
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, or furloughing your employees or relying on the Job Retention Scheme. 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 Furlough letter for previously furloughed employees for this purpose. For further information read Furlough, workforce reduction and managing employees. Alternatively, you can consider using a Change to employment terms letter.
You should note that the Government will support employees by providing an emergency wage package rescue plan called the Coronavirus Job Retention Scheme until September 2021.
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 (or ‘furloughed’) workers salary up to a maximum of £2,500 a month in addition to the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can choose to fund the difference between this payment and employee salaries, but do not have to. To be furloughed, employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Apprentices can also be furloughed.
For further information read Furlough, workforce reduction and managing employees.
The scheme will continue until the end of September 2021, after confirmation of an extension.
From July 2021 employers will be expected to contribute 10% and in August and September they will be expected to contribute 20% of wages.
||Government’s contribution to wages
|Until June 2021
||National Insurance and pension contributions
||80% up to £2,500
||National Insurance and pension contributions and 10% of the furlough pay
||70% up to £2,187.50
|August and September 2021
||National Insurance and pension contributions and 20% of the furlough pay
||60% up to £1,875
What is flexible furlough?
From July onwards, employers will be able to recall their furloughed employees part-time under the scheme (also called ‘flexible furloughing’). Employers will have to pay their employees for the hours they’ve worked while the scheme will cover their normal hours not worked (ie their furloughed days).
Employees placed on furlough from 1 November 2020, can be furloughed on a full-time or part-time basis.
For more information, read Furlough, workforce reduction and managing employees.
How to claim for 80% of wages?
To be able to claim 80% of wages you have to be eligible for the Coronavirus Job Retention Scheme. To be eligible you must have:
You'll need to make a claim via HMRC's online portal, from 20 April 2020. Once you're able to make a claim:
use the amounts in your payroll
if appropriate, reduce employees' wages to 80% of their salary before they are paid
Please note that workers need to be furloughed for a minimum of 3 weeks for you to be able to claim under the Coronavirus Job Retention Scheme.
Can furloughed apprentices continue to undertake training?
Where apprentices are furloughed, they can continue to train for their apprenticeships, as long as it does not provide services to or generate revenue for their employer.
Where training is undertaken by furloughed employees, at the request of the employer, they are entitled to be paid at least their appropriate National Minimum Wage for this time.
How can I recall a furloughed worker?
You can use 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).
Can employees on furlough take holiday?
Staff members can take annual leave while furloughed. Statutory annual leave continues to accrue as normal during a period of lay-off or furlough. This is because the contract of employment will continue to be in existence during this period. Contractual annual leave above the statutory minimum (the 5.6 weeks of holiday required by the law) will also continue to accrue, unless the contract specifically provides otherwise. For example, if an employee’s contract says that they are entitled to 7 weeks’ holiday, the employer and employee can agree to (temporarily) reduce that to 5.6 weeks.
Furloughed members of staff can request and take their holiday in the usual way, if their employer agrees. This includes bank holidays. Furloughed workers must get their usual pay in full, for any holiday they take, unless agreed otherwise (eg if the employer and employee have previously agreed to reduce the employee's pay while on furlough). Employers are able to claim 80% of salary paid on holiday days as taking holiday does not break the furlough period. This means that for holiday days taken by a furloughed worker, the employer must typically top up the 80% salary paid under the Coronavirus Job Retention Scheme so that the employee is paid 100% of their salary.
Are furloughed employees entitled to holiday on bank holidays?
If the bank holiday is a day's holiday under the employment contract, then the furloughed staff is entitled to the holiday. The furloughed staff should be paid 100% of their wage for that day.
Alternatively, employers may agree to grant a day of holiday in lieu (ie grant the employee an additional day of holiday in place of the bank holiday). If the employment contract states that bank holidays form part of the usual holiday entitlement, employers will need the employee’s consent to grant a day in lieu.
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 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.
Is financial support available for self-employed individuals struggling because of Covid-19?
The Government has announced assistance for self-employed individuals affected by Covid-19, through the Self-Employment Income Support Scheme (SEISS).
This scheme allows self-employed individuals to claim a grant for a percentage of their profits (paid in one lump sum) for the next three months, capped at a specified amount You can apply for this scheme if you are self-employed or a member of a partnership and you:
have submitted your Income Tax Self Assessment for the tax year 2018 - 2019
traded in the tax year 2019 - 2020
are trading when you apply (or would be, if not for Covid-19)
intend to continue trading in the tax year 2020- 2021
have lost trading/partnership trading profit due to Covid-19
In addition, more than half of your income must be through self-employment and your profits from this self-employment must be less than £50,000 per year.
Initially, the scheme allowed self-employed individuals to claim a grant for 80% of the average profits from the previous three tax years (where applicable) for the next three months, capped at £7,500 (ie £2,500 per month). This grant was paid directly into your bank account in one lump sum.
Where you had not yet returned your Self Assessment tax return for the tax year 2018 - 2019, you had until April 23 2020 to do so.
You could apply to the scheme using the Government’s portal until the 13 July 2020.
The Self-Employment Income Support Scheme was extended by the Government. Those eligible were able to make a claim for a second grant in August 2020.
The eligibility requirements for the second grant were the same as outlined above. However, this grant allowed self-employed individuals to claim 70% of their profits (paid in one lump sum) for another three months, capped at £6,570. You could apply for the second grant online until 19 October.
On the 24 September 2020, the Self-Employment Income Support Scheme was again extended by the Government. Those eligible will be able to make a claim for a further three-month grant in November 2020.
The eligibility requirements for the third grant are the same as outlined above. However, this grant allows self-employed individuals to claim 80% of their profits for another three months, capped at £7,500 in total. This will be paid in one lump sum. The online service for the next grant is expected to be available from 30 November 2020.
The fourth grant will cover the period of February to April 2021 and the eligibility requirements will be the same as those for the third grant.
The Government has announced this will be the last SEISS grant and will cover the period of May to September 2021. The eligibility criteria for this grant will differ and be given by assessing an individual's turnover. If your turnover has fallen by 30% or more you will still be eligible for 80% of your average trading profits for three months, capped at £7,500 in total. However, if your turnover has fallen by less than 30% you will be eligible for 30% of three months average trading profits, capped at £2,850.
For more information read the Government’s guidance, Self-Employment Income Support Scheme Grant Extension.
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:
Payment Support Service
Telephone: 0300 200 3835
Monday to Friday, 8am to 4pm
What is the traineeship bonus?
The Government has announced that it will provide 30,000 new traineeships to get young people in England into work.
Traineeships provide classroom-based lessons (eg. maths, English and CV writing) in addition to up to 90 hours of unpaid work experience. Traineeships are aimed at 16 to 24-year-olds based in England and can last from 6 weeks to 6 months during which the trainees complete a maximum of 240 hours of work experience. Providers of such traineeships are encouraged to offer trainees an interview for apprenticeship or job, if available at the end of the scheme.
The traineeship bonus will provide businesses in England with a £1,000 for each new work experience place they offer.
The expanded traineeship scheme is expected to come into effect in England from September 2020.
What support is available for business taking on apprentices?
The Government has announced that businesses will be given £3,000 for each new apprentice they hire.
This is in addition to the existing £1,000 payment the Government already provides for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.