Furlough scheme extended further

Chancellor Rishi Sunak has announced that the furlough scheme is to be extended until the end of April 2021 with the Government continuing to contribute 80% towards wages.

In a move to ensure firms can access the support they need through continuing economic disruption, Mr Sunak also confirmed that he would be extending the Government-guaranteed Covid-19 business loan schemes until the end of March.

These changes come ahead of the Budget, which the Chancellor has confirmed will take place on 3 March 2021.

This will, he said, deliver the next phase of the plan to tackle the virus and protect jobs, so the extensions to the business loan and furlough schemes enable businesses to plan with certainty and access support in the first few months of the New Year ahead of that further update on wider Covid-19 economic support.

The eligibility criteria for the UK-wide scheme will remain unchanged and these changes will continue to apply to all Devolved Administrations.

The Chancellor said he would review the employer contribution element of the Coronavirus Job Retention Scheme (CJRS) in January, but decided to bring this forward to allow businesses to plan ahead for the remainder of the winter and the New Year.

The Government will continue to pay 80% of the salary of employees for hours not worked until the end of April, he confirmed.

Employers will only be required to pay wages, National Insurance Contributions (NICs) and pensions for hours worked, and NICs and pensions for hours not worked.

The loans available until the end of March are the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme.

These had been due to close at the end of January.

The Treasury has pointed out that extending the CJRS until the end of April gives businesses certainty well ahead of the 45-day redundancy notice period, with the Budget setting out the next phase of support more than 45 days before the new end date of the scheme.

Christmas and Annual leave

With Christmas Day falling next week, organisations may wonder how they should manage annual leave over the festive period. We explore this further below.

As the festive season approaches, workers will be looking forward to spending some quality time at home with their friends and family, provided they do so with coronavirus restrictions in mind. While most staff will be entitled to enjoy some time off over Christmas, this will differ depending on the organisation’s approach and their contractual terms.

Three bank holidays span the festive period; Christmas Day, Boxing Day and New Year’s Day. Although Boxing Day falls on a Saturday this year, the bank holiday for this particular day will actually fall on the following Monday 28 December. Workers often believe that they have the statutory right to paid time off work on these days. However, this isn’t necessarily the case. Instead, this will depend on their contract of employment and employees can be made to work bank holidays, providing they still receive a minimum of 28 days paid holiday within the leave year.

Workers that are originally scheduled to work over Christmas may request this time off as annual leave. Again, organisations are free to set their own rules on holidays over the festive period, and those who operate in industries such as retail and hospitality that are currently permitted to be open may implement a blanket ban, preventing staff from taking holidays during this time to cope with increased customer demand.

Alternatively, organisations can choose to let staff book time off over the festive season, and it would be reasonable to require individuals to follow the standard procedure for requesting annual leave. Although employers may be encouraged to favour requests from staff with young children, they should consider where this may lead to accusations of favouritism.

Some employers may opt to relax rules on how many staff can be off at the same time over Christmas, especially if the business is expected to be slow. Usually, organisations may want to give extra consideration to workers from further afield who plan to travel home over the Christmas period, however these workers should be reminded about current coronavirus travel restrictions, both overseas and to different areas in the UK.

Whilst organisations should avoid trying to dictate to staff what they can and cannot do in their spare time, they should be reminded of the rules surrounding the need to self-isolate. If employees are going to need to take unpaid leave, for example, it may deter them from taking potentially risky tips.

Companies that shut down temporarily in between Christmas and New Year can opt to enforce mandatory annual leave to cover this period. For this to work, organisations must provide staff with sufficient notice. Organisations can do this by distributing an email on this matter or including this information within contracts of employment.

Staff that are currently on furlough, and therefore receiving 80 per cent of their wages, can take the Christmas bank holidays as annual leave, however they need to be paid in full for this time. This means that the organisation will need to top up their holiday pay by the remaining 20 per cent.

Workers that are curious about their entitlement to leave during the Christmas period are encouraged to review their contracts and any relevant workplace policies. While organisations do have the flexibility to set their own rules on holidays during this time, they should think carefully about which approach would best support their specific business operations.

Shorter Self-isolation periods introduced across the UK

The government has confirmed that self-isolation periods in England, Scotland and Northern Ireland are to be shortened to 10 days from Monday 14 December.

The UK government has confirmed that this change will also be extended to the rest of its nations; England, Scotland and Northern Ireland.

This change means that those who has come into close contact with someone who has tested positive for coronavirus will now need to self-isolate for a period of 10 days instead of 14. It also includes those who are quarantining after returning from a high-risk country. Currently, isolation periods for those who test positive is 10 days, and this is to remain the same.

Anyone who is currently self-isolating will be able to end their quarantine if they hit this 10-day mark from Monday, and will therefore not need to complete the full 14 days. However, if they do start to show symptoms in this time, or test positive for coronavirus, they will need to isolate for a further 10 days from this date as usual.

In a joint statement, the four UK chief medical officers (CMOs) have outlined that this decision came following a review of the evidence, saying that they are ‘confident’ self-isolation periods can be reduced in these circumstances.

Organisations will now be able to ask staff back into work after 10 days instead of 14, which will certainly help to reduce the impact of them not being able to come into the workplace for this period of self-isolation. Whilst staff that cannot work from home during this time will still be entitled to receive statutory sick pay (SSP), this will be shortened to 10 days instead of 14.

It should be noted that this will now apply across the UK, regardless of local restrictions. It is also understood that the NHS Test and Trace app will not be updated until Thursday. Because there will be a time-lag before it updates, anyone who has been advised to isolate by the app can leave isolation if their countdown timer hits three days between Monday and Thursday.

A return to the three tier system

With the current national lockdown in England now ended on 2 December, the Prime Minister has confirmed a return to the three tier system.

The Government has now launched an online tool where it should be possible to enter a postcode to confirm the relevant tier, which can be found here.

A full list of areas and the tiers to which they have been allocated is available here.

According to the Health Secretary, allocation to a tier is based on: Case detection rates in all age groups; Case detection rates in the over 60s; the rate at which cases are rising or falling; positivity rate (the number of positive cases detected as a percentage of tests taken); and pressure on the NHS.

Tier 1

There are very few regions in Tier 1 (medium alert): Cornwall, the Isle of Wight and the Isles of Scilly.

Tier 2

Within Tier 2 (High alert), the most notable entries are all 32 boroughs of London (plus the City) and Liverpool City Region (thanks, presumably to the enhanced testing trialled there).

Cumbria and Warrington and Cheshire join Liverpool in Tier 2 as do York, Worcestershire, Northamptonshire, Cambridgeshire (including Peterborough), East and West Sussex, Surrey and Windsor and Maidenhead.

Much of the South West is also in Tier 2 including Dorset, Bournemouth, Poole, Christchurch, Gloucestershire, Devon and Wiltshire and Swindon.

Tier 3

Turning to the Very High alert Tier 3, we find most of the North East including Middlesbrough, Sunderland, Newcastle upon Tyne, County Durham, Gateshead and Northumberland.

In the North West, Greater Manchester, Lancashire, Blackpool and Blackburn with Darwen all come under Tier 3 restrictions as do, on the other side of the Pennines, The Humber and West and South Yorkshire.

Much of the Midlands will also be in this tier: Birmingham and Black Country, Warwickshire, Coventry and Solihull, Staffordshire and Stoke-on-Trent in the west while in the east Nottingham and Nottinghamshire, Derby and Derbyshire, Leicester and Leicestershire and Lincolnshire are all included.

In the South East, only Slough and Kent and Medway fall into Tier 3 while the South West sees Bristol, South Gloucestershire and North Somerset included.

The measures will be reviewed every fortnight, Mr Hancock said, with the first full review to be completed by 16 December.

Furlough scheme extended

Only a few days ago we reported on the Chancellor’s decision to extend the Coronavirus Job Retention Scheme (CJRS) as a result of the Government’s decision to take England into a second lockdown.

On 5th November, the day the new restrictions came into force, Rishi Sunak was back in the House of Commons explaining to MPs that he was now planning to offer ‘significant extra support to protect jobs and livelihoods in every region and nation of the UK’.

The CJRS will now run until the end of March 2021 with employees receiving 80% of their current salary for hours not worked. In addition, the next self-employed income support grant will also increase, from 55% to 80% of average profits – up to £7500.

The Government will not pay the Job Retention Bonus in February, as previously announced, but instead redeploy a retention incentive ‘at the right time’.

There are currently no employer contribution to wages for hours not worked.

Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. For an average claim, this accounts for 5% of total employment costs or £70 per employee per month.

It should be noted that the CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.

The Job Support Scheme has been postponed.

CBI Chief Economist, Rain Newton-Smith, said: ‘Extending the tried and trusted Job Retention Scheme will give companies the certainty and stability they need to help safeguard thousands of jobs into March. Sectors and supply chains under the greatest strain may need more tailored support in the coming weeks.’

Furlough extended

Having reluctantly conceded that the three tier system in England is not reducing the coronavirus rate of infection, Prime Minister Boris Johnson has announced that he sees no alternative but to adopt tougher national measures.

There is one significant difference between the latest measures and those the country experienced during the Spring lockdown, however, and that is that the education sector – school, colleges and universities – will remain open.

While non-essential shops, leisure and entertainment venues will be closed, click and collect services will continue and essential shops, including supermarkets, will remain open.

From Thursday 5 November, ‘everyone must stay at home’ and people should work from home wherever possible with pubs, bars and restaurants all closed, except for takeaway and delivery services.

Workplaces should stay open where people cannot work from home, the Prime Minister said, in the construction or manufacturing sectors for example.

People cannot travel internationally or within the UK, unless for work, education or other legally permitted exemptions. Overnight stays away from primary residences will not be allowed, except for specific exceptions including for work.

Public services, such as job centres, courts, and civil registration offices will remain open.

Help available for businesses

The Treasury has announced that the Coronavirus Job Retention Scheme (CJRS) has been extended for one month with employees receiving 80 per cent of their current salary for hours not worked, up to a maximum of £2500.

Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ended on 31 October.

‘This means the extended furlough scheme is more generous for employers than it was in October,’ the Treasury explained.

Businesses will have flexibility to bring furloughed employees back to work on a part-time basis or furlough them full-time, and will only be asked to cover National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.

For the average claim, these contributions account for just 5% of total employment costs.

All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.

However, it must be noted that, to be eligible to be claimed for under this extension, employees must have been on an employer’s PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before that date.

In addition, business premises forced to close in England are to receive grants worth up to £3000 per month under the Local Restrictions Support Grant, as follows:

  • for properties with a rateable value of £15,000 or under, grants will be £1334 per month, or £667 per two weeks;
  • for properties with a rateable value of between £15,000 and £51,000, grants will be £2000 per month, or £1000 per two weeks; and
  • for properties with a rateable value of £51,000 or over, grants will be £3000 per month, or £1500 per two weeks.

A further £1.1 billion is being given to local authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.

Further details, including how to claim this extended support through an updated claims service, will be provided shortly, the Government has said.

Looking ahead

The Government will put its proposals to a vote in Parliament on Wednesday 4 November and, although it obviously has a healthy majority, a number of its backbenchers have expressed opposition to the idea of a stricter lockdown.

While it is extremely unlikely that the Government will be defeated in the vote, a number (including former Conservative leader Sir Iain Duncan Smith) have begun speaking out against the proposals.

They will be even more unhappy when they read comments from Cabinet Office minister Michael Gove to the effect that, if the R rate is not brought below 1, there may have to be an extension of the restrictions beyond 2 December.

Echoing his warning, Sage member Sir Jeremy Farrar said the proposed end date of the four-week lockdown was “useful” but people should not be “fixed on it”.

Finally, Greater Manchester Mayor Andy Burnham and Liverpool City Region Mayor Steve Rotherham have joined the National Education Union (NEU) in calling for England’s schools and colleges to close during the lockdown.

The NEU has warned that if schools and colleges stay open, the restrictions will be less effective.

New laws surrounding breach of self-isolation

With new laws surrounding breach of self-isolation requirements now in force, organisations need to be aware if their employees are told to isolate.

From 28th September 2020, it became a legal requirement for employees to self-isolate if told to do so as a result of potential, or confirmed, coronavirus exposure. These can range from having symptoms, to being told they have a positive case of Covid-19, to coming back from a country listed by the government has having high infection rates.

Breaching these new ‘Self-Isolation Regulations’ can lead to individuals receiving significant fines, a liability that also extends to organisations. In a nutshell, if businesses are found to have breached these requirements, they will face a fixed penalty notice of £1,000, rising to £10,000 for fourth offenses and above. It is therefore crucial that organisations understand the law.

In the Regulations, if an organisation requires an employee to come into work despite them being told to self-isolate, they will have committed an offence. This extends not just to them attending the usual place of work, but any other place connected with work that is not the location in which they are self-isolating, ie their home. For example, if an employee is asked to visit a client on work-related purposes, or even a colleague, this would still be in breach of the Regulations despite any social distancing in place and their visit only being a short one. Whilst staff can be asked to work from home if they are well enough to do so, they must not be encouraged or told by an organisation to leave here for work-related purposes.

These provisions also extend to ‘knowingly’ allowing an employee to attend the workplace, in other words being aware they have been told to self-isolate but permitting them to come into work if they want to. However, the situation does get a little bit trickier if the organisation is not aware of their employee’s situation, and this employee then goes on to breach the rules. Whilst employees are expected under the Regulations to disclose this if they have to undertake work-related activities outside of the place they are self-isolating, the law is less clear on what happens if an organisation is not told, or if the message does not get through to management.

To this end, it is vital that organisations take these new Regulations into account and make sure they are adhering to them. Employees should be clearly informed what they are expected to do if they are told to self-isolate, including who they need to tell, when and how. It should also be made clear that, due to the importance of adhering to the Regulations, failure to follow this could result in disciplinary action.

Businesses required to close due to COVID restrictions to get extra support

In an extension to the Jobs Support Scheme, which is due to begin on 1st November 2020, The Chancellor has announced that businesses across the UK are to be given support if required to close their premises due to coronavirus restrictions.

Those legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work with the aim, the Chancellor explained, of protecting jobs and enabling businesses to reopen quickly once restrictions are lifted. Eligible businesses will see two-thirds of each employees’ salary (or 67%) paid by the Government up to a maximum of £2,100 a month.

‘The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors,’ Mr Sunak said, ‘giving them the right support at the right time.’

Under the revised scheme, organisations will not be required to contribute towards wages and will only be asked to cover National Insurance Contributions (NICs) and pension contributions. Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.

The scheme will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via an HMRC claims service that will be available from early December.

Employees of firms that have been legally closed in the period before 1st November are eligible for the Coronavirus Job Retention Scheme (CJRS), the Chancellor pointed out. As the scheme is UK wide, the UK Government has said that it will work with the devolved administrations to ensure the scheme operates effectively across all four nations.

As well as the expansion of the JSS described above, the Government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3000 per month payable every two weeks, compared to the up to £1500 every three weeks which was available previously.

This could, the Treasury said, benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs and bowling alleys.

Claiming the Job Retention Bonus from February 2021

When the Chancellor announced his package of measures in July, he included a Job Retention Bonus. This is a £1000 one-off taxable payment to employers for each eligible employee that they furlough and keep continuously employed until 31 January 2021.

Now HM Revenue and Customs (HMRC) has issued guidance on the scheme which clarifies that employers will be able to claim the bonus between 15 February and 31 March 2021 and that they do not have to pay this money to the employee. Available here, this guide includes details of eligible employees, including those have been transferred under TUPE or due to a change in ownership.

It also confirms that it is possible to claim the Job Retention Bonus for individuals who are not employees, such as office holders or agency workers, as long as the employer claimed a grant for those people under the Coronavirus Job Retention Scheme and the other Job Retention Bonus eligibility criteria are met.

Among other details, the guide specifies that, to meet the minimum income threshold, an employer must pay the employee a total of at least £1560 (gross) throughout the tax months: 6 November to 5 December 2020; 6 December 2020 to 5 January 2021; and 6 January to 5 February 2021.

Only payments recorded as taxable pay will count towards the minimum income threshold. Taxable pay is reported to HMRC as a single figure through Full Payment Submissions via Real Time Information (RTI).

 

Job Support Scheme – All you need to know

On 24 September 2020, Chancellor Rishi Sunak announced a replacement to the Job Retention Scheme – the Job Support Scheme. Below are some key facts surrounding what is currently known about this scheme.

What is the Job Support Scheme? 

On 24 September 2020, the Chancellor, Rishi Sunak, announced his Winter Economy Plan designed to protect jobs and support businesses over the coming months. As part of the Plan, the Chancellor announced the Job Support Scheme (JSS) which will replace the Job Retention Scheme (JRS).

The Job Retention Scheme has been in place since March 2020 to provide wage assistance to employers who were unable to provide work to their employees because of the impact of COVID-19, and to avoid redundancies. Employers could claim up to 80% of an employee’s wages if the employee was unable to work at all, or if they were able to work only a portion of their normal working hours.

The JRS will end on 31 October 2020 and the JSS will begin on 1 November 2020. Although the JSS will still provide some wage cover to help employers, its aim is to help employers who can support employees doing some work but need more time to recover. This highlights the main difference to the JRS; the JSS will not provide wage assistance for an employee who is doing no work at all.

Which employers can use the JSS?

Employers of any size with a UK bank account and UK PAYE schemes will be able to use the JSS but large businesses will have to meet a financial assessment test to show that their turnover is lower now than before experiencing difficulties from COVID-19. The Government expects that large businesses using the JSS will not be making capital distributions, for example dividend payments or share buybacks, whilst accessing the JSS grant.

The Scheme is open to employers who have not previously used the Job Retention Scheme to furlough employees before, as well as those who have. An employee being placed into the JSS does not need to have been furloughed before.

The Chancellor has confirmed that employers using the JSS can still claim the Job Retention Bonus, which will provide employers with £1000 for each furloughed employee they continue to employ until the end of January 2021 who also meets other criteria.

Which employees can be placed on the JSS? 

An employee to be entered into the JSS must have been on the employer’s PAYE payroll on or before 23 September 2020 which means that a Real Time Information (RTI) submission notifying payment to the employee to HMRC must have been made on or before 23 September 2020.

The Scheme is intended to protect ‘viable’ jobs in businesses who are facing lower demand over the winter months due to COVID-19. The JSS will only support those who are working fewer hours than normal; not those who are working no hours.

A key criterion to gaining access to the JSS is a minimum level of working hours: for the first three months of the JSS, employees must work for at least one third (33%) of their normal working hours. This minimum threshold will be reviewed by the Government at the three month point.

Reduced hours working arrangements will need to be agreed with employees and notified to them in writing. HMRC may ask for sight of the agreement. In a departure from the JRS, employees cannot be given notice of redundancy or made redundant during the period which the employer is claiming from the JSS for that employee.

What are the wage arrangements for an employee on the scheme? 

An employee’s wages, when on the JSS, will be funded partly by the employer and partly by the Government.

Employers need to pay employees for the hours they work, which must be at least one third of their normal working hours. The employer must also pay the employee for one third of the amount of ‘lost hours’ – ie the hours the employee would normally work, but is not working.

The Government will provide pay for one third of the amount of lost hours up to a maximum cap of £697.92 per month. The employer’s contribution of one third of pay for hours not worked is not subject to a cap. This means that all employees on the JSS will continue to earn at least 77% of their normal wages, where the Government contribution has not been capped.

Determining what an employee’s normal wages/hours are will be done in a similar way to that required under the Job Retention Scheme and the Government will provide further details on this. Normal wages/hours for employees who have been furloughed will be their underlying wages and hours, rather than those which applied during furlough.

The JSS will not cover employer National Insurance contributions or pension contributions; employers will remain liable for these.

Example 1

An employee normally works 5 days a week and earns £350 per week. Under the JSS, they work 40% of normal working hours (2 days a week). The percentage of hours lost is 60% (worth £210). The employer pays £140 for hours worked, and a further £70 (one third of hours lost). The Government will pay £70 (one third of hours lost). The employee receives £280 in total per week.

Example 2

An employee normally works 5 days a week and earns £600 per week. Under the JSS, they work 50% of normal working hours (2.5 days a week). The percentage of hours lost is 50% (worth £300). The employer pays £300 for hours worked, and a further £100 (one third of hours lost). The Government will pay £100 (one third of hours lost). The employee receives £500 in total per week.

The Government expects that employers cannot top up employees’ wages above the JSS contribution at their own expense.

Once an employee is in the JSS, do they have to stay in it?

No. Government guidance confirms that employees can cycle on and off the scheme. There is also no requirement for the employee, once in the JSS, to work the same number of hours each month (provided any changes do not fall below the minimum working hours requirement).

However, each reduced hours working arrangement must last for at least seven days.

How will I receive the JSS funds?

Guidance confirms that JSS grants will be paid in arrears to reimburse the employer for the Government’s contribution.

Claims can only be submitted in respect of a wage costs actually incurred in given pay period after payment to the employee has been made and that payment has been reported to HMRC via an RTI submission.

Claims can be made online from December 2020 and reimbursement will be made on a monthly basis.