What is a ‘furloughed worker’?

The term ‘furloughed worker’ is not a familiar term used in relation to employment law within the UK. However, the government’s announcement about new support measures in relation to the coronavirus outbreak has changed this, as everyone now wants to understand what a ‘furloughed worker’ is and what the implications will be.
‘Furloughed workers’ are common in the United States, and the term ‘furlough’ relates to the temporary leave of an employee/employees due to the special needs of a company or employer, attributable to the economic conditions at a specific employer, or in the economy as a whole.

The Chancellor, Rishi Sunak, announced that if employers cannot cover staff costs due to COVID-19, they may have the option of accessing support to continue paying a portion of employee wages, in order to avoid the difficult situation of having to make redundancies. Support would be available through the Coronavirus Job Retention Scheme. It is important to note that these payments are available where there would have otherwise been a redundancy situation.

In order to access the scheme, employers will need to discuss the need to reassess impacted employees as ‘furloughed workers’, and to have discussions with those affected. For employers, changing the status of an employee remains subject to existing employment law and contract dependant may be subject to negotiation. Employers will then be required to submit information relating to furloughed employees and their earnings to HMRC via a new online portal. This has not been set up yet but will be available in due course.

Employees should not complete any work for their employers throughout the time in which they are furloughed. This will enable employers to claim a grant of up to 80% of their wages for employee employment costs, up to a cap of £2,500 per month. Workers are still classed as being employed for the period in which they are furloughed, and employers could opt to fund the differences between the payment from the government and their salary, but there is no mandatory requirement for them to do so. Therefore, if employee pay is reduced as a result of these changes, they may be eligible for support through the welfare system, inclusive of Universal Credit.

The Coronavirus Job Retention Scheme is expected to run for a period of at least three months, from 1 March 2020, but it will be extended if necessary.

Source CIPP 24-03-2020

Coronavirus General

Schools shutting down will be ‘hard for working parents’

From 20/03/20 all schools in the UK will be shut down to prevent the spread of COVID-19 which will may prove to be “hard for working parents”.

Gavin Williamson, education secretary announced on the 18/03/20 in parliament that all schools, private schools, further education colleges, sixth-form colleges and early-years care providers should close down.

Still, schools will remain open to children of “key workers” such as NHS staff, emergency services workers and delivery drivers so they can still carry out their jobs uninterrupted.

Scotland and Wales had already made this announcement earlier in the day, with Northern Ireland closing their schools on the 18/03/20.

Jamie Mackenzie, director at Sodexo Engage said:

“During this time of crisis, employers need to create an inclusive and supportive environment for all its staff, whatever their situation. While the health and safety of teachers and pupils are of course of the upmost importance right now, there is no denying that school and nursery closures are going to be hard for working parents.

At this critical time employers need to be as accommodating as possible and be mindful of those who need to look after their families. Recent research has shown that only 14 per cent of UK workers have been told to work from home by their employer during the coronavirus outbreak – but having this facility and more flexible working hours will be a huge benefit for working parents right now to reduce the extra pressures. Businesses must encourage employees to talk about their families and concerns with their employees and offer as much support as possible – there’s never been a more crucial time to put the right and necessary support structures in place.”

Jane van Zyl, chief executive of Working Families, the UK’s work-life balance charity said:

“Many working parents and carers with young children are already working from home, as recommended by the Government. Now that schools are closed, they find themselves needing to juggle work with looking after their children – including supporting their learning – at home.

Employers should continue to pay parents and carers as usual while they are working from home. Now’s the time for line managers to have sensible and understanding conversations with parents and carers of young children – particularly those working full-time – about what is needed, and what is and isn’t possible, over the coming weeks.

It’s important that the Government provides support to employers that can’t afford to continue to pay staff who are unable to work from home. This includes small employers that cannot afford to absorb any fall in productivity due to the parents and carers they employ having to work from home whilst looking after their children. Particular attention should be paid to supporting parents and carers in insecure work, including the self-employed, as they are most at risk of not being paid.

Now’s also the time for the Government to remind employers of parents’ and carers’ right to emergency time off for dependants while schools are closed, which means they cannot be dismissed or treated unfavourably as a result. This is an important right for those in insecure work who are at a higher risk of not having a job to return to.”

Source HRreview 19-03-2020

General Taxation

Increasing the flat rate tax deduction for homeworking:

The government will increase the maximum flat rate tax deduction available where employees incur additional household costs where they work at home under homeworking arrangements, from £4 per week to £6 per week. This will take effect from April 2020.

Source HMRC March 2020

Coronavirus Sick Pay

Coronavirus latest guidance and legislative updates

The situation in relation to coronavirus is rapidly evolving and things are changing every day. After laying emergency legislation on 12 March 2020, the government then pushed through a secondary piece of legislation on 16 March 2020.

The initial legislation lay the ground for anyone in self-isolation due to potential infection of COVID-19 to be deemed as being ‘incapable for work’. This new legislation came into force from 13 March 2020 and will be applicable for an eight-month period, up until 13 November 2020.

The second piece of legislation was published on 16 March 2020, to come into effect from 17 March 2020. The key difference between the two items was that the government guidance on 16 March advised individuals to self-isolate for a period of 14 days but before that point, the instruction was to self-isolate for seven days. The secondary legislation allows for the 14-day period of self-isolation.

The Department for Work and Pensions (DWP) has also published updated guidance in relation to ‘coronavirus and claiming benefits’. Within the guidance, it states:

“If you cannot work due to coronavirus and are eligible for Statutory Sick Pay, you will get it from day one, rather than from the fourth day of your illness. DWP intends to legislate so this measure applies retrospectively from 13 March 2020.

Statutory Sick Pay will be payable if you are staying at home on Government advice, not just if you are infected by coronavirus. This will apply from 13 March 2020.”

There has been much confusion relating to when the rules relating to SSP being paid from day one as opposed to day four would be applicable from, but this latest piece of guidance gives pretty much concrete confirmation that it took effect from 13 March 2020.

CIPP comment

At the point of writing, the legislation relating to SSP being paid from day one, and any regulations relating to the fact that employers with less than 250 staff can reclaim up to 14 days’ worth of SSP for coronavirus related absence per employee, are yet to be seen. As soon as there are any further updates for payroll professionals to be aware of, the CIPP will update its members via News Online.

Source CIPP 17-03-2020