Guidance on coronavirus referred to in this newsletter is correct at the time of writing. However, the guidance is fast moving so you should check with us for the up to date position.
New legal obligations following a notification via the Test & Trace Service
With immediate effect, employers and employees have new legal obligations following a notification via the test and trace service of the need to self-isolate because of a positive coronavirus test, or because the worker has come into close contact with someone who has tested positive. The new regulations came into force at midnight (12.00am on Monday 28 September 2020), with only seven hours’ notice, having been introduced at 17:00 on Sunday 27 September 2020.
What are the new obligations on workers and employers?
The new regulations introduce a wide range of measures designed to make self-isolation a legal requirement and making parents responsible for ensuring their children self-isolate where necessary. Of particular interest to employers are:
- Workers are legally obliged to notify their employers of their need to self-isolate, and the start and end dates of the isolation period, if they are expected to work anywhere other than their place of self-isolation (usually their home);
- If an employer is aware that a worker or agency worker is required to self-isolate, the employer must not knowingly allow them to attend any place other than their place of self-isolation (usually their home) for work purposes, until the self-isolation period has ended.
The combined practical effect of these changes is that, during their period of self-isolation, workers will only be able to work if they can do so from their place of self-isolation (usually their home) and, if they try to attend work, the employer should send them home. Any employer who permits a worker or agency worker to attend a place of work anywhere other than their place of self-isolation, will face a fine, starting at £1,000.
For these purposes, the self-isolation notice must follow a positive coronavirus test after 28 September 2020, or close personal contact after 28 September 2020, with someone who has tested positive for coronavirus.
Job Retention Bonus
On 8 July 2020, the Chancellor announced the introduction of a new Job Retention Bonus to provide additional support to employers who keep on their furloughed employees in meaningful employment, after the government’s Coronavirus Job Retention Scheme ends on 31 October 2020.
The Job Retention Bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.
Which employers can claim?
An employer will be able to claim the Job Retention Bonus for any employees that were eligible for the Coronavirus Job Retention Scheme and they have claimed a grant for. Where a claim for an employee was incorrectly made, a Job Retention Bonus will not be payable.
All employers are eligible for the scheme including recruitment agencies and umbrella companies.
Employers should ensure that they have:
- complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system for all employees
- maintained enrolment for PAYE online
- a UK bank account
Employers must keep their payroll up to date and accurate and address all requests from HMRC to provide missing employee data in respect of historic Coronavirus Job Retention Scheme claims. Failure to maintain accurate records may jeopardise an employer’s claim.
HMRC will withhold payment of the Job Retention Bonus where it believes there is a risk that Coronavirus Job Retention Scheme claims may have been fraudulently claimed or inflated, until the enquiry is completed.
Employers that have employees who have been transferred under TUPE or due to a change in ownership
A new employer may be eligible to claim the Job Retention Bonus in respect of employees of a previous business which were transferred to the new employer if either TUPE applies, or the PAYE business succession rules apply to the change in ownership. A new employer may also be eligible to claim the Job Retention Bonus in respect of the employees associated with a transfer of business from the liquidator of a company in compulsory liquidation where TUPE would have applied were it not for the company being in compulsory liquidation.
To claim the Job Retention Bonus under these circumstances the transferred employees must have been furloughed and successfully claimed for under the scheme by their new employer. An employer will not be eligible for the Job Retention Bonus in respect of any employee transferred under TUPE or under the business succession rules after 31 October 2020.
Which employees an eligible employer can claim the Job Retention Bonus for
Claims will only be accepted for employees that were eligible for the scheme. Where a claim for an employee was incorrectly made, a Job Retention Bonus will not be payable.
Employers will be able to claim for employees who:
- were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme
- have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31 January 2021
- have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI;
- have up-to-date RTI records for the period to the end of January
- are not serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim
Employers can claim the Job Retention Bonus for all employees who meet the above criteria, including office holders, company directors and agency workers, including those employed by umbrella companies. The above criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked and rate of pay.
What earnings can be included in the £520 a month average minimum earnings threshold
Only earnings recorded through HMRC Real Time Information (RTI) records can count towards the £520 a month average minimum earnings threshold.
For an employee to be eligible, employees must have been paid at least £520 a month on average between 1 November 2020 and 31 January 2021.
Detailed guidance will be published in September 2020.
Employees who have returned from statutory parental leave
If an employee was on statutory parental leave, returned after 10 June 2020 and was claimed for under the scheme then the employer will be able to claim the Job Retention Bonus in respect of that employee provided the other eligibility criteria are met.
Employees who are military reservists returning to work
If an employee was mobilised as a military reservist, returned after 10 June 2020 and was claimed for under the scheme then the employer will be able to claim the Job Retention Bonus in respect of that employee provided the other eligibility criteria are met.
Employees who are on fixed term contracts
If an employee is on a fixed term contract and was claimed for under the scheme then their employer can claim the Job Retention Bonus in respect of that employee provided the other eligibility criteria are met.
Contracts can be extended or renewed without affecting eligibility for the bonus, provided that continuous employment is maintained.
How employers can claim the Job Retention Bonus
When employers will be able to claim the Job Retention Bonus
From February 2021, employers will be able to claim the Job Retention Bonus through GOV.UK. More detail about this process will be published in guidance by the end of September 2020.
How much employers will be able to claim
The Job Retention Bonus will be a one-off payment of £1,000 to the employer for every eligible employee that is claimed for. The bonus will be taxable, so the business must include the whole amount as income when calculating their taxable profits for Corporation Tax or Self-Assessment.
What employers should do now if they intend to claim the Job Retention Bonus
Employers should ensure that their employee records are up-to-date, including accurately reporting their employee’s details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system. Employers should also make sure all of their Coronavirus Job Retention Scheme claims have been accurately submitted and any necessary amendments have been notified to HMRC.
- A week’s pay for furloughed staff
On 31 July 2020, the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 came into force. The Regulations will ensure that various statutory entitlements based on a week’s pay and connected with termination of employment are not reduced as a result of an employee being furloughed under the Coronavirus Job Retention Scheme. Those entitlements are redundancy pay, notice pay, compensation for unfair dismissal, failure to provide a written statement of reasons for dismissal, failure to comply with an order for reinstatement or re-engagement and remuneration for time off to look for employment or arrange training.
The Regulations create a special scheme for the calculation of a week’s pay for those employees who are or have been furloughed under the CJRS. This includes how a week’s pay is to be calculated for the purpose of deciding whether an employee is taken to be on short-time for statutory purposes. The scheme will cease to apply when the relevant statutory entitlements are no longer affected by an employee being or having been furloughed.
- Coronavirus Job Retention Scheme – errors and penalties
On 28 July 2020, HM Revenue & Customs published two new guidance documents for employers on what to do if they have claimed too much or too little under the Coronavirus Job Retention Scheme (Errors guide) and the penalties they will face if they fail to report overpayments (Penalties guide).
The Errors guide https://www.gov.uk/guidance/if-youve-claimed-too-much-or-not-enough-from-the-coronavirus-job-retention-scheme is an expanded version of information that previously appeared in the claim guide. In relation to overpayments, it confirms that employers must notify HMRC and make repayments, the process they should follow to do so, and the relevant deadlines (linking to the Penalties guide for information on the consequences of failure to comply). Where employers have claimed too little, the Errors guide confirms that they can inform HMRC and amend their claim. However, after 31 July 2020, employers will no longer be able to amend a claim for the period up to 30 June. Employers are also reminded that even where they have claimed too little, they must make the correct payments to employees.
In the Penalties guide https://www.gov.uk/government/publications/penalties-for-not-telling-hmrc-about-coronavirus-job-retention-scheme-grant-overpayments-ccfs48, HMRC confirms that it may recover the full amount of any overpayment through an income tax charge, with interest and penalties due on late repayments. Where employers fail to notify HMRC of any overpayment, penalties may be imposed of up to 100% of the overpayment where the employer’s failure was deliberate and concealed.
On 31 July 2020, Public Health England (PHE) updated its guidance to increase the minimum self-isolation period for COVID-19 from seven to ten days.
The guidance now provides that:
- Those who have symptoms of COVID-19, however mild, must stay at home for a minimum of ten days from the date on which symptoms first began. If a high temperature persists after ten days, individuals must continue to isolate until their temperature returns to normal and seek medical advice.
- Those who have tested positive for COVID-19 but who are not showing symptoms must stay at home for a minimum of ten days from the date of the positive test. If symptoms develop during this period, the ten days should restart from the date symptoms first appear.
- Any person living in the same household as an individual with symptoms of COVID-19 or a positive test result must stay at home for 14 days from the date the first individual became ill or tested positive. If any other person in the household develops symptoms during the 14-day period, they must stay at home for at least ten days regardless of where they are up to in the 14-day period.
Employers will therefore need to be aware of and ready to accommodate the minimum ten-day isolation period whenever staff develop symptoms of COVID-19, test positive, or live with someone who develops symptoms or tests positive.
To correspond with the extended isolation requirements, the Statutory Sick Pay (General) (Coronavirus Amendment) (No. 5) Regulations 2020 were made on 4 August 2020 and came into force on 5 August 2020. These confirm that a person isolating as an individual or as part of a household in accordance with the updated PHE guidance will be deemed incapable for work under the Statutory Sick Pay (General) Regulations 1982, as amended. Therefore, provided the usual eligibility criteria for statutory sick pay (SSP) are met, employees complying with the extended isolation requirements will be entitled to SSP for the duration of their isolation.
The Department for Work and Pensions (DWP) has published guidance https://www.gov.uk/government/publications/redundancy-support-for-employers providing information and support for employers making redundancies in response to the economic crisis triggered by the COVID-19 pandemic.
In August 2020, the Access to Work scheme was extended to give disabled employees additional support during the COVID-19 pandemic. Funding for special equipment to work from home will be fast-tracked for employees who are clinically extremely vulnerable (those who were shielding). For those travelling into the office, financial support will be available for taxi fares if public transport is not a safe option. Mental health support will be provided for those who feel anxious about returning to work.
On 1 August 2020, the Department for Education announced a new online and telephone support service for apprentices who have lost their jobs during the COVID-19 outbreak. The Redundancy Support Service for Apprentices (ReSSA) https://engage.apprenticeships.gov.uk/redundancy-apprentice?utm_source=press&utm_medium=story&utm_campaign=redund-app will enable apprentices to search and apply for other apprenticeship opportunities available across the country. It will also provide access to local and national financial, legal, health and wellbeing support services.
Employers have been encouraged to create more high-quality apprenticeship opportunities as part of the government’s Plan for Jobs. They are being offered £2,000 every time they hire a new apprentice under 25 years old and £1,500 for each new apprentice they hire aged 25 and over, up to the 31 January 2021. The category of “new apprentice” includes taking on an apprentice who has been made redundant.
In August 2020 the government published new guidance https://www.gov.uk/guidance/self-isolating-after-returning-to-the-uk-your-employment-rights for employees required to self-isolate for 14 days after returning to the UK, following the recent expansion of travel quarantine requirements. The guidance states that, where possible, employees should work from home during their self-isolation period. If this is not possible, employees can agree with their employer to take leave to cover the period of self-isolation.
The guidance suggests that employers should think carefully before dismissing an employee because they cannot work due to imposed self-isolation. Dismissal should be treated as a last resort and employers should consider alternative arrangements first, such as agreeing with employees to take annual leave or unpaid leave. The guidance states that employers who dismiss an employee because they have had to self-isolate following travel abroad may be liable for unfair dismissal, and emphasises that employment tribunals will consider all relevant facts surrounding a dismissal, including the public health guidance on COVID-19.
However, the guidance is silent as to whether employees required to self-isolate in these circumstances will be entitled to any pay (or statutory sick pay) if they cannot work from home.