Government support for employers as we face the coronavirus (covid-19) crisis
This page was last updated on 27/3/20
Statutory Sick Pay (SSP)
THe UK Government have announced they intend to bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to covid-19. The eligibility criteria for the scheme will be as follows:
- this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of covid-19. This includes people who are self isolating with someone in the house who has the virus.
- employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020
- employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
- the eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
- the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
Coronavirus (Covid-19) Job Retention Scheme
Under the Coronavirus Job Retention Scheme, announced a few days ago, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. The scheme will be in place for three months initially and all UK businesses are eligible.
The salary subsidy will be paid through a new HMRC system and will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage.
‘The Chancellor has announced it will be backdated to March 1.
HMRC is creating a new IT software system to run the scheme. This will take until April to complete as it requires a brand new system to reverse pay staff normally paid under PAYE rules.
Some of the most common questions we've been asked are answered below. The scheme is in development, however, so currently it's not clear what all aspects of the implementation will look like. Please come back regularly for updated posts. The HMRC web site which deals with these issues is also available.
Q. Who can access the Job Retention Scheme?
A. Any UK employer, large, small, charitable or non-profit, can access the scheme. If they cannot cover staff costs due to COVID-19, they may be able to access financial support to avoid making employees redundant.
Q. I've heard some employees may receive 100% of salary. Is this correct?
A. An employer can claim 80% of the employee's salary from HMRC, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Individual businesses can decide to top this up to 100% with their own money, if they wish.
Q. How does an employer provide proof that an employee is classified as furloughed?
A. Currently, no proof is necessary, but there may be an update on payroll systems to provide this information at a later date.
Q. Are company directors eligible for the Job Retention Scheme?
A. Directors can make a claim if they are paid their salary through payroll. The claim can be made on salary only, not dividends.
Q. How does an employer access the scheme to make a claim?
A. Information on furloughed employees' earnings will need to be submitted to HMRC through a new online portal (currently in development). But if you have agreed a furlough period, got a letter or email confirmation of this, and have a date documented then you've got everything in place for when HMRC get their system up and running
Q. How long will I be able to claim the salary support?
A. At the moment, it runs for 3 months from 1st March 2020 - i.e. until the end of May 2020. The government say they'll extend it if necessary.
Q. What do I need to do now?
A. You will need to discuss with the worker that they are being classified as a "furloughed worker", which means they are kept on payroll rather than being laid off. Give them a letter or email confirming this, and the date on which they are being furloughed from. Get them to formally agree to this change in status, in writing. To qualify for the scheme, the employee must not do any work for you whilst they are furloughed.
Q. What about reduced hours working, or staff who have agreed a pay cut?
A. Furlough leave is recommended for anyone that would have otherwise been laid off or made redundant due to the impact of coronavirus on the employer’s business.
It does not help with any situations where employees had agreed to reduce their hours, or to a pay cut but where they are still required to work. There is currently no option to do a mixture of reduced hours and furlough leave.