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Scroll to: Furlough extension | National Lockdown Number 3 | Vaccine | IR35 | Furlough | Employees and self-isolation | Face masks/coverings | Other considerations | Flexible furlough | Test and Trace | Getting back to work | EMI Options | Alternatives to redundancy | Restructuring the Workforce / Changing Terms and Conditions | How does holiday work during furlough? | Lockdown Exit Strategy | Pensions | Self-Employed | Health & Safety | Summer budget update

Furlough extension

Video: The Budget 2021Last updated on 4th March, 2021

Our employment law experts, Gillian Chinhengo and Gill Burns, give a brief update on the key points in Rishi Sunak’s budget of 3 March 2021.

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Video: Furlough extension Q&ALast updated on 13th November, 2020

Given the complexity of the changes to the furlough scheme, our employment law experts spend about 30 minutes updating you on how the land now lies, and then answer your questions that were submitted in advance or live during the event.

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How long will the extended CJRS last?Last updated on 4th March, 2021

The government has said that the CJRS will remain open until 30 September 2021.

Can employees not previously furloughed be furloughed under the extended scheme?Last updated on 16th November, 2020

Yes, employees do not need to have to have been previously furloughed, nor are employers required to have previously used furlough, in order to make use of the extended scheme.

What information will HMRC publish about employers using the CJRS?Last updated on 4th March, 2021

From February 2021, HMRC have published details of employers who have claimed for periods starting on or after 1 December 2020, specifically the employer’s name, an indication of the value of the claim that has been made and, for companies and LLPs, the company registration number.

If an employer can show that having their details published will result in a serious risk of violence or intimidation to an individual then their details will not be published. If you think that this exception applies, you must contact HMRC explaining why and providing evidence.

If I have an employee intending to end her maternity leave, is she eligible for furlough from May onwards?Last updated on 4th March, 2021

If her maternity leave is due to end on or after 1 May 2021 then she can be furloughed. However, if she is ending her maternity leave early she must give you 8 weeks’ notice of her intended return to work and this cannot be shortened even by agreement.

Can we pay SSP (with no waiting period) along with furlough when someone self-isolates?Last updated on 16th November, 2020

The usual four day waiting period which applies before an employee is eligible for SSP has been suspended for people with COVID-19 so it can now be paid straight away. However, an employee can either be paid SSP or furlough pay – not both at the same time.

Can we rehire people who we have made redundant and bring them back on a fixed term contract rather than the same contract they were on prior to be made redundant?Last updated on 16th November, 2020

Where an individual was employed as at 23 September 2020 and appeared on an employer’s RTI submission to HMRC at some point between 1 March and 30 October 2020 then the employee can be re-hired for the purposes of claiming under the CJRS. We would recommend a break in service of at least one complete week (ending on a Saturday) and it should be made clear to the individual that their employment is solely for the purposes of enabling that individual to access the CJRS. Employers should be careful to avoid any suggestion that the individual has been reinstated into their previous role, if in reality that role no longer exists. Where individuals are re-instated this raises questions around continuity of service and repayment of redundancy pay, all of which means that if the individual were to be made redundant in future then a new redundancy exercise would need to be undertaken.

Can we claim furlough whilst employees are serving their notice period?Last updated on 4th March, 2021

Previously, yes, but not since the end of November. From 1 December onwards employers can no longer use the CJRS to pay contractual or statutory notice pay.

 

What are the rules around employees that transfer under TUPE? What deadlines are now in place?Last updated on 16th November, 2020

Employees transferring to you under TUPE can be claimed for under the CJRS is each of the following applies:

  • They were employed by either their old or new employer on 30 October 2020.
  • They transferred from their old employer to their new employer on or after 1 September 2020.
  • A PAYE RTI submission to HMRC was made by their old or new employer between 20 March 2020 and 30 October 2020, notifying a payment of earnings for them.

Under the CJRS extension, a new employer (the transferee) is eligible to claim under the scheme but only if the PAYE scheme has transferred. This would cover a traditional TUPE transfer but at this stage it is therefore not clear whether or not it would apply to a service provision change.

Previously there were certain things directors could do on furlough, is this still the case?Last updated on 16th November, 2020

Whilst furloughed statutory directors can continue to perform certain limited tasks; restricted to their statutory duties (as set out in the Companies Act 2006) but must not do more than would reasonably be judged necessary for that purpose. The individual cannot do work that generates commercial revenue or provides services to or on behalf of your company.

Can furlough be used for Covid sickness or self isolation when an employee can’t work from home?Last updated on 16th November, 2020

The guidance states that the CJRS should not be used for short-term illness but CJRS can be used for employees regarded as clinically extremely vulnerable. The CJRS can also be used where the employee is being furloughed for business reasons and happens to be sick.

Can employees classed as clinically extremely vulnerable still attend work if they want to for their own wellbeing?Last updated on 11th January, 2021

The National Lockdown 3 Guidance state that the clinically extremely vulnerable should now be shielding. They should not therefore be attending the workplace in whatever circumstances.

Employers owe their employees a duty of care which includes ensuring their health and safety at work. Even if a clinically extremely vulnerable employee says that it is having a detrimental impact on their mental well being to remain working from home, it is difficult to envisage circumstances in which an employer would be able to allow that employee to come into work. It is unlikely to be any protection for an employer if  an employee says that in these circumstances they will not bring a claim against their employer if they catch COVID-19 in the workplace particularly as the Government guidance is that the clinically extremely vulnerable should not attend work.

Does the National Minimum Wage/National Living Wage apply for those furloughed under the original scheme?Last updated on 4th March, 2021

Workers are still entitled to the National Minimum Wage, (with the National Living Wage set to increase to £8.91 from April 2021) for the hours that they work. However, for hours that they are furloughed they are not working so the National Minimum Wage legislation does not apply, and employers should use the set reference period for calculating their claim, without reference to any subsequent increase in National Minimum Wage rates. Any time spent training is treated as working time so you must ensure that your employees are still paid the National Minimum Wage when this time is taken into account but the furlough pay would normally cover this.

Can staff provide training whilst furloughed?Last updated on 16th November, 2020

Furloughed staff can undergo training and still be eligible for furlough pay (so long as they are paid National Minimum Wage for the time spent training). However, if an employee is actually providing training to others then this is likely to be seen as providing a service to the employer and therefore that employee could not be furloughed on days/hours where they were providing that training.

Can I fully furlough my finance staff, who does not bring sales or income to the company but still completing my company year end?Last updated on 16th November, 2020

No, you can only claim for staff under the CJRS if they are not doing any work for you. For the purposes of the scheme, it does not matter whether that work generates income or not. It may however be appropriate to use flexible furlough in this situation to furlough them for part of the time if they are not required to work all of their usual hours.

We have started a redundancy consultation process in February. Can an employee insist that they are furloughed until the scheme ends rather than be made redundant?Last updated on 4th March, 2021

No, the decision to furlough an employee is the employers and an employee cannot insist that they are furloughed. An employer will still incur costs using the CJRS extension and those costs will increase from 1 July 2021. Employers should be able to demonstrate that they have considered furloughing staff as an alternative to redundancy, but we anticipate that Employment Tribunals will conclude that there is no obligation to use the scheme, rather than continue to make redundancies, where this would not reflect business need.

Can we require staff to take annual leave while they are furloughed?Last updated on 18th November, 2020

An employer should consider if the employee is under any restriction e.g. self-isolating which would prevent them from relaxing and enjoying their holiday. It is not clear whether lockdown would be regarded as something which would prevent an employee from enjoying their annual leave.

If there is no such restriction then employers can require their employee’s to take holiday provided they give the employee twice as much notice as the holiday they are required to take e.g. you would need to give 2 weeks’ notice of a 1 week holiday. Check the contract and your holiday policy as this may specify additional requirements.

If it is not possible to require the employee to take the leave you can rely on legislation which has been brought in that permits up to 4 weeks’ leave to be carried over the next 2 years immediately following the leave year which the leave was due where it has not been possible to take it because of the coronavirus.

Do we have to top up the 20% when holidays are taken?Last updated on 16th November, 2020

Yes, employees should receive full pay for any holiday they take.

Could staff be furloughed when there is a much quieter period of work?Last updated on 5th January, 2021

The guidance states than an employee should not be furloughed just so that holiday pay can be claimed, and furloughing staff for this purpose risks a claim under the CJRS being invalidated. However, if getting staff to take holiday is not the sole motivation and there is justification within the remit of the CJRS then it may be sensible to place staff on furlough, and require them to take holiday during this time.

If a worker is funded by a particular project grant, can you still flexibly furlough when there is no work because of the impact on those he/she would normally work with?Last updated on 16th November, 2020

When making a claim under the CJRS scheme, an employer must confirm that they are claiming for the ‘costs of employing furloughed employees arising from the health, social and economic emergency’ which result from COVID-19. If they are unable to work because COVID-19 has made their colleagues unavailable then this is likely to be covered by the scheme.

Furlough scheme extended – what’s happeningLast updated on 4th March, 2021

On 3 March 2021, it was announced that the Coronavirus Job Retention Scheme (CJRS) would be extended until 30 September 2021.

The CJRS had been due to come to an end on 30 April 2020 and, potentially, replaced by the new Job Support Scheme (JSS) from 1 May 2021. However, as currently understood, the start of the JSS will continue to be postponed until the CJRS ends.

 

How will the extended scheme operate?Last updated on 4th March, 2021

The government has said that the extended CJRS will operate as the previous scheme did until the end of June 2021, and it is anticipated that businesses will continue to be paid upfront to cover wages costs.

Employers will be able to claim in the usual way.

Claims can be made:

  • in respect of an employee for a minimum 7 day claim window
  • in advance

Grant payments are anticipated 6 working days after the first claims.

It is anticipated that, as previously, claims relating to each month should be submitted by day 14 of the following month e.g. claims relating to March 2021 must be made by 14 April 2021.

It is also anticipated that there will be no gap in eligibility of support between the previously announced end-date of CJRS on 30 April 2021 and this extension starting 1 May 2021.

What support is being provided under the scheme?Last updated on 4th March, 2021

For claim periods running to July 2021, the level of the grant will mirror levels available under the CJRS in August 2020, so the government will pay 80% of wages for hours not worked by the employee, up to a cap of £2,500 per month.

It is anticipated that, as previously, this means that for hours not worked by their employee, employers will only be asked to cover National Insurance and employer pension contributions.

Employers will have to pay the employee’s wages for the hours they work as normal, as well as employer National Insurance and employer pension contributions.

For claim periods from 1 July 2021 to 31 July 2021, employers are required to contribute 10% with the government paying 70% of wages, and for claim periods from 1 August 2021 to 30 September 2021, employers are required to contribute 20% with the government paying 60% of wages.

What is the cost to employers of the extended CJRS?Last updated on 4th March, 2021

Whereas the government has recently covered the full 80% of wages (subject to the £2,500 cap):

  • for claim periods from 1 July 2021 to 31 July 2021, employers are required to contribute 10% with the government paying 70% of wages, and
  • for claim periods from 1 August 2021 to 30 September 2021, employers are required to contribute 20% with the government paying 60% of wages.

Employers will need to:

  • pay their employees for the time worked and the government grant for the time not worked;
  • operate PAYE on behalf of their employees, as per CJRS;
  • pay employer National Insurance contributions and pension contributions for their employees on the full amount that they pay the employee, including any scheme grant.

 

How is pay calculated?Last updated on 6th November, 2020

For employees that meet the eligibility criteria, and were previously furloughed, employers must use the same calculations for calculating reference pay and usual hours as CJRS.

For an employee who meets the criteria of the extended scheme but was not previously eligible for CJRS, the alternative calculations of reference pay and usual hours must be used. For all other employees, employers must use the CJRS calculations for calculating reference pay and usual hours.

All employees on an RTI submission on or before 19 March 2020 will be able to use the CJRS calculations as applied in August 2020 for reference pay and usual hours.

However, for new employers claiming and new employees hired between 20 March 2020 and 30 October 2020 the CJRS methodology will update the reference pay and usual hours to take account of the period covered by the extension.

For employees on fixed pay employed on or after 20 March 2020, the last pay period prior to 30 October 2020 is the basis for calculation. For employees on variable pay or hours, employed after 20 March, the average of tax year 2020 to 2021 up to the start of the furlough is the basis for calculation.

For employees who were previously eligible for CJRS, the calculation rules will remain the same.

The existing CJRS calculation of 80% of usual wages and of usual hours will apply to all employees who were eligible under CJRS even if a claim was not made for that employee under CJRS to 31 October 2020.

Where an employee was not previously eligible for CJRS, the calculation will take account of updated reference periods.

Reference pay: calculating 80% of wages

If an employee was not previously eligible for CJRS, 80% of wages must be calculated for employees:

  • on a fixed salary – 80% of the wages payable in the last pay period ending on or before 30 October 2020
  • whose pay varies – 80% of the average payable between the employment start date or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins.

80% of wages is capped at the maximum wage amount which will be calculated in the way it was for CJRS before the extension.

Can an employer top up salary above 80%?Last updated on 6th November, 2020

Yes, as with the current CJRS, employers are able to top up employee wages above the 80% / £2,500 cap at their own expense if they wish.

Will flexible furloughing be allowed?Last updated on 6th November, 2020

Yes, as under the current CJRS, employers will have flexibility to bring furloughed employees back to work on a part time basis – or to furlough them full-time.

Which employers are eligible to use the scheme?Last updated on 11th January, 2021

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.

As before, the government expects that publicly funded organisations will not use the scheme.

Partially publicly funded organisations may be eligible where their private revenues have been disrupted.

From February 2021, HMRC will publish details of employers who have made claims under the extended CJRS scheme from on or after 1st December 2020.

Which employees are eligible for the scheme?Last updated on 6th November, 2020

Employees must be 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 30 October 2020.

As under the current CJRS rules:

  • Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Calculations will broadly follow the same methodology as currently under the CJRS.
  • When claiming the CJRS grant for furloughed hours, employers will need to use a minimum claim period of 7 consecutive calendar days.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

Can I re-employ a redundant employee and then furlough them?Last updated on 11th January, 2021

For claims for periods after 1 November 2020, employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 30 October 2020, notifying a payment of earnings for those employees.

Also, an employee who was on a fixed term contract, on payroll on 23 September, and that contract expired after 23 September can be re-employed and claimed for, provided that the other eligibility criteria are met.

What about furloughing employees whose health has been affected by COVID-19?Last updated on 11th January, 2021

Employees can be furloughed who are unable to work because they:

  • are shielding in line with public health guidance or at the highest risk of severe illness from coronavirus, or need to stay at home with someone who is shielding, or
  • have caring responsibilities resulting from coronavirus, including employees that need to look after children or vulnerable individuals.

Can an employee take part in training or work for another employer while furloughed?Last updated on 6th November, 2020

Yes, employees can take part in training, volunteer for another employer or organisation and work for another employer (if contractually allowed).

As under the CJRS previously, employees cannot do any work for their employer, during hours which employees are recorded as being on furlough, that makes money or provides services for their employer (or any organisation linked or associated with their employer).

What should employers do now?Last updated on 11th January, 2021

Employers will need to review the existing agreements they have in place with furloughed staff and consider seeking their agreement to the period of furlough being extended, if appropriate.

Employers that have already put in place working arrangements with employees under the CJRS will need to contact employees to seek agreement to the extension of the CJRS.

Where an employer wants to furlough employees who had not previously been furloughed, steps should be taken to secure the agreement of  those employees.

Video: Employment Q&ALast updated on 6th November, 2020

Employment experts Gillian Chinhengo, Caroline Shafar and Rachel Blythe answer questions about furlough, the job support scheme, redundancies and more.

Please note that this was recording before the extension to the furlough scheme on 5th November.

National Lockdown Number 3

Which workplaces must shut and which can remain open?Last updated on 5th January, 2021

The Government has produced a guidance document for this specific national lockdown. It sets out which businesses must close and those that can remain open even in a limited capacity. Here’s a link to the guidance: https://www.gov.uk/guidance/national-lockdown-stay-at-home#businesses-and-venues 

Should my employees be attending the workplace during the national lockdown?Last updated on 6th January, 2021

No unless they cannot reasonably work from home. The national lockdown is at “stay at home” order; people must not leave their home unless they have a ‘reasonable excuse’. The expectation is that people should be working from home wherever possible.

People who cannot reasonably work from home are defined as those who work in critical national infrastructure, construction, manufacturing, tradespeople, nannies or cleaners. We also expect that the definition of those who cannot reasonably work from home  will cover people who struggle with their mental health and to remain at home would have a detrimental impact

Can colleagues meet outside of work during the national lockdown?Last updated on 5th January, 2021

Yes, but only for work purposes and where it is unreasonable to do so from home. Work colleagues cannot meet to socialise.

Can I ask my employees to travel for work during the national lockdown?Last updated on 5th January, 2021

As above, people must not leave their home unless they have a ‘reasonable excuse’ and travelling should be limited to their local area. Employees may leave their home and local area to travel for work if they cannot reasonably work from home. You should attempt to reduce the number of journeys they make.

Can I ask my employees to stay away from home overnight during the national lockdown?Last updated on 5th January, 2021

As above, employees must not leave their home unless they have a ‘reasonable excuse’.

What can I do to make sure my home-working people are doing so safely?Last updated on 5th January, 2021

  1. Keep in touch. If contact is poor, workers can feel disconnected, isolated or abandoned. This can adversely affect stress levels and mental health – especially in the current crisis when everyone is feeling more anxious.
  2. Think about the use of laptops/devices (DSE) at home. Provide a basic form of risk assessment for self-completion.
  3. Remind workers of simple steps to reduce the risks from display screen work:
    • take regular breaks (at least 5 minutes every hour) or change activity
    • avoid awkward, static postures by regularly changing position
    • get up and move or do stretching exercises
    • avoid eye fatigue by changing focus or blinking from time to time

Can an employee who has the resources to work from home, but struggles to do so, attend their place of work during the national lockdown?Last updated on 5th January, 2021

Whilst many employees may now have the resources and equipment to work from home, an employee may struggle to effectively work from home for a number of reasons. For example, an employee may not have a suitable working environment where they can work without being disturbed or alternatively, working from home for prolonged periods of time may be having a detrimental impact on the employee’s mental well-being.

In circumstances such as these, employers must carry out a careful assessment. Unfortunately, there is not any specific guidance as to when an individual cannot ‘reasonably’ work from home – it is likely that each case will be fact specific.

In relation to employees who are struggling with their mental well-being, employers owe their employees a duty of care. It is crucial that procedures are in place which will enable an employer to recognise the signs of stress as early as possible. In the circumstances, it may be appropriate to allow an employee to attend their place of work if this would help alleviate work-related stress or to prevent mental health issues.

Can we still use the furlough (coronavirus job retention scheme)?Last updated on 6th January, 2021

Yes. For further guidance, please see our FAQs section on Furlough.

What options do I have if my employee, who can work from home, is struggling to do so because they have young children at home who need “teaching” and supervision?Last updated on 5th January, 2021

This is likely to be a common situation and employers and employees are going to have to take a pragmatic approach. You could enter into a temporary flexible working arrangement perhaps agreeing to vary working hours/days or reducing targets or agree to use some annual leave.

Employees could ask to take a period of unpaid leave, asserting their right to time off to care for a dependant but the lack of pay is likely to be unappealing.

Alternatively employees who are unable to work because they have caring responsibilities as a result of COVID-19, which includes childcare responsibilities, can be furloughed.

What options do I have if I have staff with childcare responsibilities but their job cannot be done at home?Last updated on 5th January, 2021

If it is not possible to find work for the employee to do at home, you do have the option of putting the employee on furlough.

Can we ask for proof of caring responsibilities and if so what would be reasonable proof?Last updated on 5th January, 2021

Yes, but be reasonable and sensitive to avoid any claims of associative or indirect discrimination.

The National Lockdown Guidance states that anyone who is clinically extremely vulnerable should not attend work. What options do I have if an employee is in the clinical extremely vulnerable category but cannot do their job at home?Last updated on 5th January, 2021

The now defunct Guidance for the Tier system suggested that the clinically extremely vulnerable would be treated in the same way as those who were shielding in Lockdown 1. This means that anyone who is clinically extremely vulnerable and cannot work remotely, will be entitled to SSP. These employees should receive a letter confirming that they are deemed to be clinically extremely vulnerable/shielding and you should ask for a copy of it as evidence to support a claim for SSP. It is likely that the Lockdown 3 Guidance will be the same.

You could also furlough an employee in the clinically extremely vulnerable category. Again we do not anticipate this changing.

What happens if an employee refuses to attend work because they are afraid of being exposed to COVID-19 particularly the new more transmissible strain?Last updated on 5th January, 2021

An employee can refuse to attend work but their refusal to do so will have to be based on a reasonable belief that their health and safety is in danger.  Whether or not their refusal is reasonable will take into consideration factors such as the employee’s own health and whether they are at a higher risk of becoming seriously ill if they contract Covid-19 and the steps their employer has out in place to mitigate the danger of contracting Covid-19 at work.

In such circumstances where the employee’s belief is deemed to be reasonable, they will be entitled to stay at home and receive full pay.

If an employee is subsequently dismissed for refusing to attend work in these circumstances, they may be able to bring a claim for unfair dismissal.

What if an employee cannot work from home but is genuinely afraid of travelling / going into work – what options do I have?Last updated on 5th January, 2021

There is less guidance in respect of whether an employee can refuse to go into the workplace as a result of health and safety concerns about their commute. An employer’s duties to ensure the health, safety and welfare of its employees only extend to the workplace or where an employee is acting in the course of their employment. This does not include the risks of travelling to and from work by public transport.

As there are various ways in which an employee can travel to work, it will be difficult for them to legitimately refuse to come to work due to their commute.  Employers should discuss any concerns with the employee and seek to find an appropriate resolution. The government has published guidance on safer travel for passengers during the Covid-19 pandemic and employers should encourage flexibility as far as possible, such as allowing employees to travel at off-peak times and staggering workers’ hours.

If an employee refuses to come into work is their absence unauthorised and do I have to pay them?Last updated on 5th January, 2021

This would depend on the reason as to why the employee is refusing to come into work. An unauthorised absence is where an employee fails to attend work and they do not have a statutory or contractual right, or their employer’s permission, to do so. An employer will not be obliged to pay employees their normal pay for periods of unauthorised absence.

There are some absences which may be viewed as authorised which would entitle the employee to their full pay. For instance, employees who believe that they are in serious and imminent danger by coming to work would be entitled to stay at home and receive pay if their belief is deemed reasonable.

An employer should always try to discuss any unauthorised absences with an employee. They may then consider whether to take disciplinary action against the employee.

What can I do as an employer if employees are known to be breaking the National Lockdown rules?Last updated on 5th January, 2021

This will depend on the particular facts and the employee’s circumstances but an employee should co-operate with the employer so far as is necessary to enable compliance with any statutory duty or requirement relating to health and safety.

In addition, conduct outside of work can result in an employee’s dismissal if the conduct pertains to the employment relationship. If an employee breaches the lockdown rules and it affects their ability to work, such as it being no longer safe for them to attend work, or the reputation of the employer, these may be grounds for disciplinary action and subsequent dismissal.

How do I take “all reasonably practicable steps” to protect my employees during the coronavirus outbreak?Last updated on 5th January, 2021

Follow up to date UK Government advice. This can be found at: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-coronavirus-covid-19

For best practice and more detailed information; consult the HSE’s website at https://www.hse.gov.uk/news/coronavirus.htm

Failing to follow the guidance is likely to be regarded as failing to take all reasonably practicable steps.

Do I need to do anything extra to safeguard my employee’s mental health during the Covid-19 outbreak?Last updated on 5th January, 2021

Homeworking can cause work-related stress and affect people’s mental health and being away from managers and colleagues could make it difficult to get proper supervision and support.

Encourage your employees to keep in touch. Put procedures in place so you can keep in direct contact with home workers and can recognise signs of stress as early as possible. Use group chat and video chat tools imaginatively.

Have an emergency point of contact and share this so people know how to get help if they need it.

People are much more anxious than usual and may be less productive as a result – recognise this and try to be patient.

I have essential workers who do home visits. How do I assess the risks?Last updated on 5th January, 2021

The fundamentals of risk assessment remain the same as for any other foreseeable risk.

Focus on risk controls which reflect Government guidance; social distancing (2 metres) and avoiding contact with occupiers if possible, high-quality PPE – disposable overalls, gloves and fluid repellent surgical face masks, ready access to antibacterial wipes for surfaces, tools and equipment and plentiful hand sanitizer.

Vaccine

Can I demand that my employees have the vaccine?Last updated on 6th January, 2021

In most circumstances the answer will be no. It would be an infringement of their human rights. It could also be a criminal assault.

However where there is a high risk to employees of exposure to COVID-19, such as care homes and healthcare environments, you might be able to make it a requirement of their role to have the vaccine.

First, consider whether you need to have a blanket requirement covering all employees or whether only certain groups who work in the most high risk areas require the vaccine.

You will need to do a thorough risk assessment balancing the amount that the risk of exposure would be reduced against the interference with the employee’s human rights. Consideration will need to be given as to whether insisting on the vaccine is proportionate to the risk and whether other less invasive steps could be taken instead, such as maintaining social distancing, wearing a mask, washing hands.

Any requirement for employees to be vaccinated should be communicated clearly to employees and trade unions together with a clear explanation for why it is necessary.

What is the risk if I insist that my employees have the vaccine?Last updated on 6th January, 2021

If you do not have a justifiable reason for insisting that your employees have the vaccine (see FAQ above) your employee could resign and bring a claim of constructive unfair dismissal if they have more than 2 years’ continuous employment. This would be on the basis that you have breached trust and confidence.

If the vaccine includes pig gelatine (as many do), and the employee refuses on religious or because they are vegan, you may face a claim for discrimination under the Equality Act 2010.

Can I dismiss an employee if they refuse to have the vaccine?Last updated on 6th January, 2021

See above FAQ about whether you can demand that your employee has the vaccine.

Dismissal for failing to follow a reasonable instruction would be a possibility but it should be the last resort.

First you will need to be able to show that you have reasonable grounds for insisting that they have the vaccine. You will then need to demonstrate that you have taken into consideration the reasons why the employee has refused and why they are not considered reasonable. Before taking a decision to dismiss you should look at alternatives such as other duties/other roles.

What about someone who refuses because they are against the vaccine (the anti-vaxers)?Last updated on 6th January, 2021

It is a theoretical possibility that “anti-vax” beliefs could be a philosophical belief under the Equality Act 2010 and therefore anti-vaxers have the right not to be discriminated against for their beliefs. Much will depend on why the individual is against the vaccine. Conspiracy theorists (the vaccine is being used as an opportunity to monitor you or it’s all because of 5G) are highly unlikely to be treated as having a philosophical belief!

IR35

What is IR35?Last updated on 4th February, 2021

IR35 is an anti-tax avoidance regime which is intended to tackle (in HMRC’s view) the long standing issue of individual contractors providing their services or labour via an intermediary – which is usually a personal service company (referred to as a PSC). We’ll talk about PSCs here, but there are other types of intermediaries that are caught.

HMRC’s view is that this arrangement is often considered to be disguised employment and therefore a tax-avoidance arrangement.

So IR35 is essentially a test of employment status – and if, once you apply the test, the contractor should be an employee, they should then be taxed as an employee.

When does IR35 generally apply?Last updated on 4th February, 2021

It would apply if the contractor uses an intermediary to provide their services or labour and they would be deemed to be an employee or office holder for tax purposes if they were hired directly by the end user client rather than via the intermediary PSC. This would of course require an assessment of employment status for tax purposes.

Contractors who are not taxed in the UK and supply their services exclusively from outside of the UK are unaffected.

If IR35 applies, tax and NIC’s should be deducted under PAYE by the PSC. In reality this has not been happening so a major reform of the regime was due to be implemented in April 2020. The changes were postponed by one year and are due to take effect from 6 April 2021.

“Within IR35” means a contractor arrangement is caught by IR35 and the individual should be taxed as an employee.

“Outside IR35” means a contractor arrangement is not caught by IR35 and the contractor status is fine.

How is IR35 changing?Last updated on 4th February, 2021

The current position is that the PSC is responsible for assessing whether IR35 applies. This current regime has been difficult to police by HMRC and HMRC considers there is widespread flouting of the rules by contractors.

From April 2021 the responsibility for assessing whether IR35 applies will shift to the end user/client (with the exception of ‘small’ companies) which will require an assessment to be carried out on a contract by contract basis. HMRC anticipates that this will be easier to monitor and that end user businesses will be more compliant.

The reformed regime will apply to payments made on or after 6 April 2021 for services carried out on or after this date.

What is a small company?Last updated on 4th February, 2021

The changes will not apply to end users who are a small company. If you meet two out the following 3 conditions, you will meet the small company definition and are therefore exempt from the changes to IR35:

  1. Annual turnover is no more than £10.2 million
  2. Balance sheet total is no more than £5.1 million
  3. No more than 50 employees

Companies will always be classified as small in their first financial year. Public companies will always be considered to be medium or large businesses and cannot fall under this exemption.

For a group company to be a small company its parent company must also meet the small company definition.

What is the new process for assessing status under IR35?Last updated on 4th February, 2021

The end user client will be responsible for assessing if the contractor is employed or self-employed for tax purposes. It is required to take reasonable care in carrying out the assessments.

When an assessment is carried out the outcome must be confirmed to the contractor with accompanying reasons in a Status Determination Statement (SDS). This SDS must be provided to the contractor before making payment to them. It must also be provided to the agency if there is one in the chain (more on this later).

The end user client must have a dispute resolution procedure to enable to the contractor or agency to appeal the assessment outcome.

What if a contractor is deemed to be employed?Last updated on 4th February, 2021

The fee payer that pays the fee to the contractor’s PSC for the services (end user client or agency) will be responsible for operating PAYE and deducting NIC’s. The fee payer must also pay employer NIC’s and where applicable the apprenticeship levy so there will be additional costs involved in the event of a change to employed status for tax purposes.

If the assessment concludes that the contractor is self-employed, the PSC can continue to be paid gross.

What if the status determination is disputed?Last updated on 4th February, 2021

You should have in place a dispute resolution procedure that sets out the appeal process or contractors or the agency as appropriate. You must respond to an appeal within 45 days.

If the status determination is disputed you should consider the contractor or agency’s reasons objections. You must consider if the original determination is to be maintained and give reasons for this. Or a new determination with reasons can be provided if appropriate.

Records of disputed determinations and the outcome of any appeal should be kept.

How do I determine contractor status?Last updated on 4th February, 2021

You must exercise reasonable care in assessing status and making a status determination, considering what the position would be if the contractor was engaged directly by the end user client instead of via a PSC.

Status is usually determined by looking a number of factors and how they apply to the contractor’s working arrangements. This is a difficult exercise that is usually carried out by employment and tax lawyers and it is full of grey areas. We have a toolkit that can help you navigate this process which Paul will tell you more about at the end of the session.

The key factors used to determine status  are:

  • Control:
    • How much control does the end user client have over the contractor in terms of working arrangements (hours, place of work) and how the work is carried out? Or is the individual contractor able to determine how and when they work and without direct supervision of the end user client?
  • Personal service:
    • Is the contractor required to perform the services personally without the right to send a substitute? If there is a right to appoint a substitute is this subject to end user client approval?
  • Mutuality of obligation:
    • Is the end user client obliged to provide the contractor work with a mutual obligation on the contractor to accept that work?

What other factors may be considered?Last updated on 4th February, 2021

  • Integration:
    • Is the individual held out as being employed by the business by having a company email address, uniform, how would they introduce themselves to customers?
  • Exclusivity:
    • Is the contractor restricted from working for other organisations without the consent of the end user client?
  • Length of engagement:
    • Is the contractor engaged to work on a specific project for a defined period? Or are they engaged for an indefinite period with no reference to a specific task or project?
  • Pay:
    • Are there regular fixed payments or is payment on completion of specific task or commission based? Is the contractor entitled to benefits or bonuses?
  • Facilities:
    • Does the contractor provide their own equipment and materials to provide the services?
  • Financial risk:
    • Is the contractor personally responsible for any loss arising from their work in performing the services? Will they have to rectify unsatisfactory work at their own time and expense? Will they have the opportunity to profit from the success of a project?

What are some other factors?Last updated on 4th February, 2021

No one factor will determine status and the outcomes will differ depending on the nature of the work being carried out and the business of the end user client.

When you have carried out an assessment based on the relevant factors you can either get in touch with us to discuss further, check your answers against HMRC’s CEST tool or do both before making a final determination.

Do you need to use HMRC’s CEST tool?Last updated on 4th February, 2021

CEST stands for Check Employment Status for Tax and, although this should do exactly what is says on the tin, there has been criticism of its accuracy and effectiveness. The CEST tool does not test whether there is ‘mutuality of obligation’ in the relationship which is a key factor in determining status.

You are not obliged to use CEST if you are happy with your own assessment process. If you do use CEST keep a record of the certificate given at the end of the assessment and keep this on the contractor’s file. HMRC will stand by the outcome of a CEST assessment provided the information has been honest and accurate. However, you must have entered information honestly to rely on it – you can’t just say what you want to get the right answer, as HMRC may test what you have said.  Also, many people are unhappy with the CEST tool and consider it leans too much towards employed status.

Are there any differences in employment status for employment law or for tax purposes?Last updated on 4th February, 2021

The key factors for determining status for employment and tax purposes are generally the same. However there are some cases that highlight the different approaches taken by employment tribunals and HMRC when determining status. The important thing to consider for IR35 purposes is that being deemed employed for tax purposes does not mean a contractor is ’employed’. PSC’s can still be used in moving forward but there are likely to be discussions on the commercial aspects of the contractor arrangement. Employment status for tax purposes is likely to come at a cost for both parties.

What if I get the status wrong?Last updated on 4th February, 2021

As long as you can demonstrate that you have exercised reasonable care in determining status you have discharged your obligations in that respect. However, if you are unable to demonstrate this, you may as the end user client be responsible for the contractor’s tax and NIC’s.

What if the contractor is supplied by an agency?Last updated on 4th February, 2021

As mentioned earlier, if an agency is involved you must send them a copy of the status determination statement for each contractor, and they will also have the right to dispute the outcome.

If the agency pays the contractor, they will be responsible for the operation of PAYE and NIC’s deductions and any apprenticeship levy. The agency may try to recover these costs from the end user client.

If workers are supplied by an agency or umbrella company and are already treated as employees by the agency, they will remain unaffected by IR35.

Do all contractors have to be assessed?Last updated on 4th February, 2021

Individual contractors who are not operating via an intermediary (eg sole traders) do not need to be assessed under IR35. However, you will always have the risk with those individuals that there is no intermediary – therefore if their tax status is wrong, HMRC are very likely to consider that responsibility for this would fall on the hiring company in any event.

Can I reduce the risk of IR35 applying?Last updated on 4th February, 2021

It is possible to review working arrangements for contractors before the new rules come into effect. This will require immediate action.

You could consider terminating current contracts and entering into new terms that reflect working arrangements for a self-employment arrangement.

Another possibility is encouraging contractors to abandon the PSC model and provide services under a compliant umbrella company.

In the event of a determination of employed status you should seek to enter new terms that at the very least reflect the new tax arrangements .

What should be included in genuinely self-employed contractor terms?Last updated on 4th February, 2021

If you consider the factors used to determine status you can include the following terms that are more in line with a self-employed relationship:

  • The right to provide a substitute of the contractor’s choice in the event the individual is not able to perform the services;
  • The ability to work for other businesses as long as doing so will not affect the services to be provided by the contractor;
  • The contractor should have sufficient control over how, when and where (if possible) they provide the services;
  • A degree of financial risk can be included for unsatisfactory work or failing to complete a project or task

We have terms that cover all of these points that can be tailored to your needs. The consultancy agreement is included in our IR35 toolkit.

What are the additional costs for the end user if the contractor is deemed employed?Last updated on 4th February, 2021

The immediate impact is accounting for payroll purposes for the additional cost of 13.8% employers NIC’s and 0.5% apprenticeship levy on top of the payment to the contactor’s PSC.

Secondary NIC’s cannot be recovered from payments due to employees and the same applies under the new IR35 regime. However, new terms can be agreed with reduced level of fees to reflect this additional cost.

Can I wait until April to carry out assessments?Last updated on 4th February, 2021

We don’t recommend this. Status determination statements must be issued before 6 April 2021 for current engagements and the appropriate deductions are to be made on payments for services carried out on or after 6 April 2021.

What about office holders?Last updated on 4th February, 2021

Office holders who provide services under an intermediary (such as a service company consultancy agreement) and whose services relate to the office held, would fall under the IR35 regime and must be assessed accordingly.

Preparing for April 2021 – what do you need to do?Last updated on 4th February, 2021

  • Audit
    • Identify your off-payroll contractors
    • Determine the status of off-payroll contractors
      • CEST – HMRC employment status checker for tax purposes
  • Communication – liaise with affected workforce
  • Contracts – get them compliant
  • Consider the Ward Hadaway toolkit

What is in the WH Toolkit?Last updated on 4th February, 2021

We have developed a toolkit to assist with compliance. The Toolkit contains a specimen contract; detailed guidance; step by step guides and flowcharts; details of the factors to take into account for the status determination test; procedures for challenging the determination; and standard letters for the process.  Click here to fill in a form and register your interest in the Toolkit, which contains:

  1. Detailed guidance in the form of Key Facts
  2. Employment status checklist
  3. Employment status assessment flowchart
  4. Status questionnaire and guidance
  5. Letter confirming self-employed status (agency)
  6. Letter confirming employed status (agency)
  7. Letter confirming self-employed status (direct with PSC)
  8. Letter confirming employed status (direct with PSC)
  9. Status disagreement process guidance
  10. Status disagreement process flowchart
  11. Letter confirming outcome of status disagreement process
  12. Consultancy agreement

Furlough

How the furlough scheme changed from 1 July – what is flexible furlough?Last updated on 25th September, 2020

From 1 July 2020 the furlough scheme has been operating more flexibly.

The key changes from 1 July 2020 were:

  • All furloughed employees are subject to the new flexible furlough rules and the new basis for calculating claims
  • Furloughed employees can be brought back to work on a part-time basis for any amount of time and can work any work pattern
  • Employers can claim for the hours not worked compared the hours the person would normally have worked in that period
  • There must be a new written furlough agreement in place to record the agreement with the furloughed employee to return to work part-time
  • The new agreement (including a collective agreement) must be made before any period of flexible furlough begins but it may be varied at a later stage if necessary. The agreement must be incorporated into the employee’s contract of employment, either expressly or impliedly
  • Employers must keep a record of this agreement until at least 30 June 2025, and they must also keep a record of the hours the furlough employee worked and the hours that they were furloughed
  • Employees can be furloughed from 1 July 2020 for any amount of time and more than once
  • However, if you re-furloughed an employee after 10 June but before 1 July 2020, they had to be furloughed for an initial period of three consecutive weeks
  • Claims for payments under the scheme must not cross calendar months so if you are claiming for the initial three week period of a re-furloughed employee who was furloughed on 12 June for example, you must submit separate claims for the dates in June and July
  • Although flexible furlough agreements can last any length of time, you should only submit a claim to HMRC once a week.

Can I use flexible furlough to utilise an employee’s holiday entitlement?Last updated on 25th September, 2020

Employees are generally permitted to take holidays during furlough. However, Government guidance has been updated to state that “Employees should not be placed on furlough for a period simply because they are on holiday for that period.” If a period of furlough happens to coincide with an employee’s holiday then you should ensure that there are business grounds to support furlough being used in that instance so that it isn’t just being used as a means to fund holiday utilisation.

Am I obliged to offer staff flexible furlough?Last updated on 15th June, 2020

No, there is no obligation on employers to offer a flexible furlough arrangement to staff. Operationally, flexible furlough may not be appropriate for your business and equally, returning on a part-time basis may not be suitable for individuals already furloughed for various reasons. Concerns about returning to work part-time or at all should be considered on a case-by-case basis.

What will be the added cost to business of furloughing staff from 1 July 2021?Last updated on 4th March, 2021

Similar to the position for claims between 1 August 2020 and 31 October 2020, for claims between 1 July 2021 and 30 September 2021 there will be a cost to businesses of furloughing staff, which will gradually increase until the scheme closes at the end of September as follows.

  • From 1 July 2021 employers will be required to contribute 10% of wages, with the Government contributing 70%.
  • From 1 August 2021, the employer contribution increases to 20% and the Government will contribute 60%.
  • 30 September 2021: scheme closes.

Employees will continue to receive 80% of their current wages, up to £2,500 a month.

 

VIDEO EXPLAINER: The ten most frequently asked questions about furloughLast updated on 4th March, 2021

Consultant Peter Byrne and associate Hollie Ball discuss some of the most frequently asked questions we have received about furlough in this 20 minute video.  This was originally recorded on 16th April, and therefore incorporates the updated guidance issued by the Government on Wednesday 15th April, but does not refer to Rishi Sunak extending the period of the scheme.

On the 22nd April 2020, we have incorporated an updated answer to our response on holidays, since there was important additional guidance issued by the Government the preceding weekend.

Questions answered and their timings are:

  1. Does an employer need to obtain consent to furlough employees? (1.20)
  2. Can an employee demand that they are furloughed? (2.28)
  3. Can you furlough an employee who is on sick leave or shielding? (4.00)
  4. At what date does an employee have to be employed at in order to be considered for furlough? (5.46)
  5. Can you rotate employee’s on and off furlough? (8.07)
  6. What is included in the 80% funded under the scheme? (9.21)
  7. How do you calculate wages for staff with variable pay? (11.28)
  8. What can an employee do while on furlough? (13.25)
  9. How will an employer make a claim under the scheme? (16.49)
  10. What is the position with holidays during furlough? (19.00)

To watch the video, please click the link below.

Read more about this

Can I rotate staff who are furloughed? Can I put someone on furlough, bring them back when I need to, and then put them back on furlough, as demand requires? And practically how can we deal with this for those who want to rotate?Last updated on 11th January, 2021

You can rotate staff on furlough or flexible furlough.

One option is to make it clear in the letter agreeing to being furloughed that there is an open ended right to rotate and to be able to take them off furlough and bring them back and put them back on.

So the employer reserves the ability to rotate by building into the agreement, but only exercises it if it is permissible.

Rotation is quite key for employers who need to make a temporary reduction to their overheads but want to retain the skills base to call back when work picks up. Having furloughed staff return on a part-time basis may reduce the need to rotate.

It also helps in the employer being able to show that they are treating the workforce as fairly as possible and everyone is taking a reduction. Get in touch if you need help preparing the documentation for furlough that will permit rotation or flexible furlough.

Read more about flexible furlough and how this can be used as part of the CJRS.

 

Are there any limitations on who can be furloughed?Last updated on 11th January, 2021

 

Employees on any type of employment contract including full-time, part-time, agency, flexible or zero hours and foreign nationals who are eligible to work in the UK on any visa can be furloughed subject to the following excluded categories:

  • Anyone who was not employed prior to 30 October 2020
  • Anyone for whom you haven’t made a PAYE Real Time Information submission to HMRC between 20 March 2020 and 30 October 2020.
  • Employees who are working but on reduced hours or for reduced pay
  • Employees currently receiving SSP (see FAQ on SSP and self-isolation below)
  • Public sector employees
  • Employees of businesses or organisations in receipt of public funding for staff costs (except for those who are not primarily funded by the government and whose staff cannot be redeployed to assist with the Covid-19 response)

Can contractors with public sector engagements and who are in scope (deemed employment) for IR35 purposes be furloughed?Last updated on 11th January, 2021

Contractors working for public sector organisations who are deemed employees for IR35 purposes may be eligible to be furloughed provided they are paid via PAYE. In this scenario the agreement to furlough would be made between the contractor’s personal service company (PSC) and the fee payer (usually the agency). The parties would agree that the contractor will carry out no work for the public sector organisation while furloughed and the fee payer would apply for the grant.

At the moment the guidance states that in order to be eligible a claim for furlough must have to have been submitted by 31 July 2020 for a period of 3 weeks between 1 March and 30 June 2020.

Can apprentices be furloughed?Last updated on 11th January, 2021

The government has stated that the scheme will apply to apprentices and that they can continue to train whilst they are furloughed. However you must pay at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage for all periods of training during furlough leave, taking into account the rate increases from 1 April 2020 and the increases which will take effect from 1 April 2021. This means that you will be responsible for any shortfall in the amount claimed under the scheme and the appropriate minimum wage.

We recommend that you get in touch to discuss any queries on furloughing apprentices.

Should my apprentice continue their training during the coronavirus outbreak, even if they’re furloughed?Last updated on 7th April, 2020

The Government maintains that apprenticeships will be an important part in the economic recovery post-lockdown and therefore ESFA is encouraging training under apprenticeships to continue, even where an apprentice is furloughed, provided that the training does not provide services to or generate income for their employer. E-learning is being encouraged as a method of delivery.

Should I pay my apprentice to continue training?Last updated on 11th January, 2021

Employers should ensure that apprentices are paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW//NMW) as appropriate (and taking into account the new rates which will take effect from 1 April 2021) for training carried out where their wage received through the Coronavirus Job Retention Scheme does not cover this.

How do I make arrangements for end point assessments for apprentices?Last updated on 7th April, 2020

Arrangements for end point assessments can be modified or rescheduled. End point assessment organisations should engage with External Quality Assurance Providers to agree arrangements for the end point assessments where face-to-face assessments are being modified. Where rescheduling is required due to Covid-19 issues and there is a specified time limit for the ESA post gateway, a further pause of 12 weeks is allowable. This should be recorded by the training provider in the ILR.

Can the apprentice take a break or pause in learning due to coronavirus?Last updated on 7th April, 2020

A break or pause in learning can be initiated where the interruption to learning due to Covid-19 is greater than four weeks. This must be reported as a formal break in learning. In such circumstance the funding to the training provider will be suspended for the duration of the break. Previously, the rules only allowed an apprentice to initiate this break in learning but this has been expanded to give employers and training providers the right to initiate this. Training providers should continue with their monthly IRL submissions to the ESFA. During breaks in apprenticeships it is not necessary for the apprentice to comply with the minimum of 20% on the job training requirement but this will resume when the break ends.

What happens if an apprentice is made redundant?Last updated on 7th April, 2020

Where an apprentice is made redundant the training provider should support the apprentice in seeking alternative employment within a 12 week period. ESFA will support this process. Where an apprentice is placed on unpaid leave or the nature of their employment no longer supports their apprenticeship, it should be considered whether a break in learning would be appropriate.

An employer who wishes to make an apprentice redundant should seek advice on the process to be followed for this.

Will funding audits continue during the coronavirus pandemic?Last updated on 7th April, 2020

Funding audits are being paused and no new audits will be commenced during the lockdown period.

Will HM Treasury continue to collect my apprenticeship levy payments?Last updated on 7th April, 2020

HM Treasury have no current plans to pause the collection of apprenticeship levy payments from employers, therefore levy-paying employers must continue to make payments. There is also no plan to extend the 24 month period allowed to spend levy funds.

What should I do if my apprentice is due to finish their fixed-term contract during the pandemic?Last updated on 7th April, 2020

Employers who have apprentices on fixed-term contracts due to end during the pandemic should discuss arrangements with the apprentices including whether an extension to the contract can be offered to allow them to complete their apprenticeship.

Are there any other useful resources about apprenticeships during the coronavirus outbreak?Last updated on 25th September, 2020

On 6 April 2020 the Government published further guidance to clarify the position with apprentices during the Covid-19 outbreak. The full guidance is available from here https://www.gov.uk/government/publications/coronavirus-covid-19-apprenticeship-programme-response/coronavirus-covid-19-guidance-for-apprentices-employers-training-providers-end-point-assessment-organisations-and-external-quality-assurance-pro

The guidance includes details of the measures implemented by the Education and Skills Funding Agency (ESFA) in order to provide flexibility in delivering apprenticeships in current circumstances. This includes breaks in learnings, delayed end point assessments and alternative arrangements for end point assessments. These measures apply immediately and until further notice.

There are a number of FAQs within the Government guidance which deal with common queries. The guidance contains some technical provisions and we recommend that you take advice if you are furloughing or making apprentices redundant. If you have any additional queries on the practicalities of implementing the ESFA measures please get in touch.

Further guidance changes to apprenticeships due to coronavirus can be found here.

Can directors, partners or those working under umbrella companies be furloughed?Last updated on 5th May, 2020

Yes. The updated government guidance has confirmed that office holders (including company directors), salaried members of Limited Liability Partnerships (LLPs) individuals working under umbrella companies (including agency workers) and individuals who are classified as ‘workers’ rather than employees can be furloughed but only to the extent that they are paid via PAYE. Therefore director’s fees can be claimed (subject to the cap) but dividends are excluded, as are bonuses and commission payments.

Those who are paid annual are now eligible to make a claim, subject to meeting the remaining requirements. This includes being notified to HMRC on an RTI submission on or before 19 March 2020 which relates to a payment of earnings in the 19/20 tax year.

The decision to furlough a director or office holder should be adopted as a formal decision of the company or LLP which should be minuted and notified in writing.

Company directors can only undertake work to fulfil a duty or other obligation arising from an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company while furloughed and they cannot carry out work that would generate revenue or perform services to or on behalf of their company. This also applies to salaried individuals who are directors of their own personal service company (PSC).

Can agency workers be furloughed?Last updated on 6th April, 2020

Yes, if they are paid via PAYE. This includes agency workers engaged under umbrella companies.

The furlough should be agreed between the agency (the employer) and the worker and documented in accordance with the guidance. It is recommended that the decision to furlough is discussed with end user clients. Just like other employees, agency workers cannot perform work through or on behalf of the agency while furloughed. This includes work for the client.

For agency staff working under umbrella companies, it is for the umbrella company and the agency worker to agree on furloughing the worker.

Can employees on fixed-term contracts be furloughed?Last updated on 11th January, 2021

Yes. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme.

If the employee’s contract has not already expired, the contract can be extended or renewed. The employee may be furloughed provided that they were employed on or before 30 October 2020. You must also have made a RTI submission to HMRC between 20 March 2020 and 30 October 2020.

If the employee’s contract expired on or after 23 September 2020, the employee can be re-employed and furloughed. Please note that the employee must have been employed by you on 23 September 2020 and you must have made a RTI submission to HMRC between 20 March 2020 and 30 October 2020.

 

Can you furlough a suspended employee?Last updated on 15th June, 2020

Yes. You should be able to furlough a suspended employee subject to all other eligibility requirements however we recommend that you take advice on this before doing so.

Can an employee on family related leave be furloughed?Last updated on 5th May, 2020

Yes, but your claim will be limited to any enhanced contractual payments you make to employees who qualify for the relevant family related pay.

All maternity and parental rights remain in force for anyone in this category who is furloughed. However you may need to calculate average weekly pay differently if the employee was furloughed and then started family related leave on or after 25 April 2020.

Furlough pay cannot be claimed for the period that an employee is receiving Maternity Allowance. An employee can agree to accept furlough pay but they must contact Jobcentre Plus to stop their Maternity Allowance payments for this period.

What rate of pay applies to an employee returning from statutory leave who is furloughed?Last updated on 20th April, 2020

Statutory leave includes family related leave, sick leave or parental bereavement leave. Claims for furloughed individuals returning from statutory leave should be based on their salary, before tax, and not the pay they received while on statutory leave.

Similarly, claims for furloughed employees returning from a period of unpaid leave on sabbatical should be based on their pay they would have had on paid leave.

Can furloughed employees carry out work for another business during furlough?Last updated on 6th April, 2020

Yes, if there is a contractual right to do so. Furloughed employees who start work with another employer during this time must inform HMRC that they have another job.

Can employees volunteer if they have been furloughed?Last updated on 31st March, 2020

Yes. The Government has confirmed that those on furlough will also be permitted to volunteer to help the NHS during the coronavirus outbreak without risking their pay.

Can furloughed workers still continue with union or non-union representation duties?Last updated on 5th May, 2020

Yes, they can continue to undertake duties or activities for representative purposes. This includes individual or collective representation of their colleagues. They must not carry out any actual work or generate revenue for their employer or a linked or associated organisation.

How do you manage employees who aren’t furloughed and are unhappy that they still have to work?Last updated on 11th January, 2021

Although there is no formal selection process that must be followed in order to furlough staff, the basis for selecting who will be furloughed should be explained to all relevant staff. Basing this on work levels, required skills or whether work can in fact be carried out efficiently from home will help this process. Staff can be invited to volunteer to be furloughed or re-furloughed. Any requests can be considered on a case by case basis. It may be that a particular skill set is required which may result in an employee’s request being refused.

Can those on sick leave or who have been advised to self-isolate be furloughed?Last updated on 11th January, 2021

If an employee is self-isolating (as a result of the pandemic) they may be entitled to SSP. Employers should not furlough employees in this category just because of their absence, but they can furlough if there are genuine business reasons for doing so and other eligibility requirements are met. In these cases the employees should no longer receive sick pay and they would be classified as furloughed.

The guidance has specified that those on long term sick leave or who are ‘shielding’ for 12 weeks in line with public health guidance can also be furloughed. But it is important that you clarify that they do fall in the category of extremely vulnerable (https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19). It is up to employers to decide whether to furlough employees who are shielding or on long-term sick leave.

You can claim from the CJRS and also for the two week SSP rebate scheme (see below) for the same employee but not for the same period of time. Therefore if you have a furloughed employee who becomes ill and you subsequently move them to SSP you cannot claim the furlough rate of pay. If you keep the employee on the furloughed rate you can continue to claim this under CJRS.

Coronavirus Statutory Sick Pay Rebate SchemeLast updated on 25th September, 2020

The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the SSP paid to current or former employees and will be available from 26 May 2020. See here.

The scheme covers all types of employment contracts and employers will be eligible to claim if they:

  • Are claiming for an employee who is eligible for sick pay due to coronavirus
  • Had a payroll scheme that was created and started on or before 28 February 2020
  • Had fewer than 250 employees on 28 February 2020

The repayment will cover up to 2 weeks starting from the first qualifying day of sickness, if an employee is unable to work because they either:

  • have coronavirus (COVID-19) symptoms
  • cannot work because they are self-isolating because someone they live with has symptoms
  • are shielding and have a letter from the NHS or a GP telling them to stay at home for at least 12 weeks
  • have been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus
  • they have been notified by the NHS to self-isolate before surgery

You can claim for periods of sickness starting on or after:

  • 13 March 2020 – if your employee had coronavirus or the symptoms or is self-isolating because someone they live with has symptoms; or
  • 16 April 2020 – if your employee was shielding because of coronavirus.
  • 28 May 2020 – if your employee has been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus
  • 26 August 2020 – if your employee has been notified by the NHS to self-isolate before surgery

Employees do not have to give you a doctor’s fit note for you to make a claim. But you can ask them to give you either:

  • an isolation note from NHS 111 – if they are self-isolating and cannot work because of coronavirus
  • the NHS or GP letter telling them to stay at home for at least 12 weeks because they’re at high risk of severe illness from coronavirus
  • the evidence from the NHS or public health body requiring them to self-isolate

You must keep the following records in relation to a claim you make under the scheme for three years:

  • The reason for the employee’s absence
  • Details of each period the employee could not work, including start and end dates
  • Details of the SSP qualifying days when the employee could not work
  • National insurance numbers for each employee you have paid SSP to

You’ll need to print or save your state aid declaration (from your claim summary) and keep this until 31 December 2024.

Do I have to continue to pay furloughed staff while furloughed? Can I wait until I receive the money from the government?Last updated on 5th May, 2020

To qualify for a grant under the scheme you must pay your furloughed staff the wages you are claiming for. Failure to do so may result in a HMRC investigation and/or claims from furloughed staff for unlawful deductions from wages and possibly constructive dismissal claims.

Normal benefits including non-monetary benefits should continue during furlough unless the individual has agreed in writing to reduce or remove a benefit during this time.

Employers are expected to apply for one or more of the financial support schemes available to be able to continue to pay staff.

Can I ask furloughed staff to agree to accept less than 80% of their normal pay?Last updated on 14th April, 2020

The guidance is clear that furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500).

Employers cannot enter into any transaction with the worker which reduces the wages below this amount. This includes any administration charge, fees or other costs in connection with the employment.

How will normal salary be calculated for those with no normal working hours, such as zero hours workers?Last updated on 16th April, 2020

For those with variable pay, if the employee has been employed for a full 12 months before the period claimed for you, can take the higher of:

  • The same month’s earnings in the previous year; or
  • Average monthly earnings from the 2019/20 tax year.

For those who have been employed for less than one year you can use the average of their monthly earnings since they began their employment until the date they were furloughed.

If they have been employed for less than a month, work out a pro rata for their earnings so far, and claim for 80%.

What payments can be included in the claim for a grant?Last updated on 20th April, 2020

You can claim for regular payments you are obliged to pay staff such as non-discretionary overtime, non-discretionary fees, non-discretionary commission and piece-time payments. Overtime in this context is referred to as ‘past overtime’ in the updated guidance which would suggest that you should use the variable pay calculation (see FAQ above) for those who regularly carry out overtime.

Are benefits to be included in the claim for a grant?Last updated on 14th April, 2020

You cannot include the following payments in a claim:

  • Discretionary bonus or commission payments
  • Tips
  • Non-cash payments
  • Non-monetary benefits including taxable benefits in kind
  • Salary sacrifice benefits that reduce an employee’s pay (however HMRC has agreed that such arrangements can be stopped by agreement if due to COVID-19 and the contract is changed)

The updated guidance has confirmed that all of the grant claimed should be paid to the employee in the form of money and that none of the grant is to the used to pay for the provision of benefits or a salary sacrifice scheme.

What is the Government’s Coronavirus Job Retention Scheme?Last updated on 4th March, 2021

All employers in the UK are eligible to participate in the scheme. The purpose of the scheme is to allow employers to claim back employment costs if they have furloughed employees arising from the coronavirus crisis. Importantly this means the scheme is not limited to cases where the employee would otherwise have been made redundant.

Key points:

  • Between 1 November 2020 – 30 June 2021, the government will reimburse employers for 80% of wage costs, up to a cap of £2,500 per month, with employers expected to contribute 10% of that 80% in July 2021 and 20% of that 80% in August and September 2021. Employers will still need to pay employer NICs and employer pension contributions (these cannot be claimed for).
  • The scheme now also allows employees to return to work part time being on furlough for the remainder. See flexible furlough above for more information.
  • The employer can agree to pay the employee more than it will be reimbursed but it cannot reclaim the additional amount or any other costs associated with the additional amount.
  • The workers covered by the scheme are those who have been “furloughed” which is a leave of absence.
  • Workers must be told about and agree to this change of status (see below).
  • Employers have to continue to pay the furloughed workers and the Government will reimburse the employer.
  • HMRC is administering the scheme and it has been extended until the end of September 2021
  • Those who left employment and are re-employed and subsequently furloughed by agreement are eligible (please see the FAQ regarding redundancy and furlough above).
  • Payments may be withheld if claims are based on inaccurate or dishonest information, or are found to be fraudulent. HMRC has put in place an online hotline for employees and the general public to report suspected fraudulent claims.
  • The Government has made alternative help available for employers to continue to pay employees while the scheme is set up.

How does Coronavirus Job Retention Scheme operate?Last updated on 11th January, 2021

  • Certain workers will become “furloughed workers”.
  • Furloughed workers cannot carry out any work for their employer while designated as furloughed, or a linked or associated organisation but they can do voluntary work as long as they are not providing services for or generating revenue for the employer or a linked or associated organisation.
  • A furloughed worker can be furloughed part time and work the rest of the time.
  • The furlough period begins when the employee stops work, not when agreement is reached.
  • If furloughed employees are expected to do online training while furloughed they must receive the National Living Wage/National Minimum Wage for the time spent training.
  • Workers must be told of and agree to this change in writing. This written agreement must be kept for five years as part of the scheme. The guidance has confirmed that collective agreement reached between an employer and a trade union on furloughing staff is acceptable for the purposes of making a claim under the scheme.
  • However it should also be noted that this is a change in status and pay (if pay is not being topped up) and therefore subject to the usual employment law rules on changing terms and conditions.
  • Changes to the contract must be made by agreement with the worker and the government guidance is clear that to be eligible for the subsidy employers must document their communication with the employee on being furloughed.
  • You must confirm in writing that an employee has been furloughed, but that the employee does not need to provide a written response. Please note that this is for the purposes of making a claim under the scheme. Any reduction in pay must be agreed in writing under normal employment law principles and failure to do so may result in Employment Tribunal claims. You should not rely on a term in the employment contract to effect this change. We can advise you on how to document this properly.
  • Employers must also keep a record of the agreement for at least 5 years.
  • If employers have collective bargaining arrangements in place, they must agree this change with the union in the usual way.
  • Collective consultation obligations may be triggered if there are 20 or more employees that are proposed to be dismissed and re-engaged in order to effect the change to terms to be furloughed. You should take advice if you think this may apply.

How do I access the Coronavirus Job Retention Scheme?Last updated on 11th January, 2021

The scheme is being administered by HMRC under a new online portal that has been set up. It applies to businesses, charities, recruitment agencies, individuals who employ a nanny, administrators (where there is a reasonable likelihood of re-hiring the workers) and public authorities.

All employers with a UK payroll can apply as long as you have:

  • Created and started a PAYE payroll scheme on or before 28 February 2020
  • Enrolled for PAYE online (which can take up to 10 days)
  • A UK bank account.

To make a claim you will need:

  • The number of employees being furloughed
  • The start and end date of the claim
  • The name and National Insurance Numbers for each furloughed employee
  • Your employer PAYE reference number
  • To be registered for PAYE online
  • The Self-Assessment Unique Taxpayer Reference, Corporation Tax Unique Taxpayer Reference or Company Registration Number as appropriate for your entity
  • Your UK bank account details and sort code
  • Your name and contact number
  • Your organisation’s registered name
  • Your organisation’s billing address
  • The full amounts you are claiming for including:
    • Employee wages
    • Employer national insurance contributions
    • Employer minimum pension contributions

For claims for those who are flexibly furloughed you will also need:

  • the number of usual hours the employee would work during the claim period
  • the hours the employee has worked or will work during this period
  • you will also need to keep a record of the number of furloughed hours that the employee has or will be furloughed for.

You will need the above information ready before you access the system to make a claim. You will also need to have calculated the amounts claimed in advance as the application needs to be completed in one session. You can currently save one draft of the application and it must be completed within 7 days of starting it.

The Government has issued a step-by-step guide for employers who wish to make a claim under the scheme which can be found using the link below. It contains useful information about calculating the payments claimed. You will need to register for a Government Gateway ID and password if you do not yet have one in order to access the portal.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/880099/Coronavirus_Job_Retention_Scheme_step_by_step_guide_for_employers.pdf

If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf. If you use a file only agent (who files your RTI return but doesn’t act for you on any other matters) they won’t be authorised to make a claim for you and you will need to make the claim yourself. A file only agent can assist you in obtaining the information required to make a claim (listed above). If an agent makes a claim on your behalf you will need to tell them which bank account you would like the grant to be paid into.

For claims for fewer than 100 employees you will need to input the details separately for each employee. If claiming for more than 100 employees you can upload a file with the information instead. The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional). You will also need to include details of hours normally worked, actual hours worked and hours furloughed for those who are flexibly furloughed.

The need to demonstrate the impact of coronavirus on your business is not one of the criteria listed above about who can make a claim, so the government does not appear to intend to set a specific test to determine if a business is “severely impacted by coronavirus”. You are not required to explain the impact of Coronavirus on your business when submitting your claim.

HMRC will retain the right to audit any claim retrospectively. You must keep records for 6 years including:

  • the amount claimed and claim period for each employee
  • the claim reference number
  • you calculations for each claim
  • details of hours usually worked and hours actually worked for flexibly furloughed employees.

You must tell your employees that you have made a claim under the scheme, and you must continue to pay their wages during this time.

Employees and self-isolation

Can I require my staff to inform me should their circumstances be such that they need to self-isolate?Last updated on 29th September, 2020

Yes.

Workers (and agency workers) who are aware of the requirement to self-isolate and are due to work during their isolation period at a place other than their designated place (see below) must, as soon as reasonably practicable and in any event before they are next due to start work within the isolation period, tell their employer that they are self-isolating, and set out the start and end dates of their isolation period.

Clear communication to all workers about their obligation to do this is strongly recommended.

Can I be fined for failing to take steps to try to ensure that my staff comply with the requirements to self-isolate?Last updated on 29th September, 2020

Yes.

An employer which is aware that a worker or agency worker is or ought to be self-isolating, should not knowingly allow that worker or agency worker to leave the place that they are self-isolating in (“the designated place”).  To do so without reasonable excuse would amount to an offence which could result in the employer being issued with a fixed penalty notice.

The value of the fixed penalty varies depending on if it is the first or subsequent fixed penalty notice to be issued:

First fixed penalty notice £1,000
Second fixed penalty notice £2,000
Third fixed penalty notice £4,000
Fourth, and any subsequent fixed penalty notice £10,000

If a member of staff does not inform me that they ought to be self-isolating will I still be liable for a fine?Last updated on 29th September, 2020

Potentially no.

If an employer is not put on notice that the circumstances of a worker or agency worker are such that they ought to be self-isolating, by either the worker or agency worker themselves or another member of staff, then there ought to be a reasonable excuse, and potentially, no fixed penalty notice will be issued.

Face masks/coverings

What are the new rules about wearing face masks in the workplace?Last updated on 25th September, 2020

The new rules for wearing face masks/face coverings in the workplace introduced on 23 September 2020 are as follows:

  • Staff in retail, including shops, supermarkets and shopping centres, will now have to wear a face covering
  • Staff in hospitality will now have to wear a face covering
  • Guidance stating that face coverings and visors should be worn in close contact services, such as hairdressers and beauticians, will now become law
  • Staff working on public transport and taxi drivers will continue to be advised to wear face coverings

You can take off your mask if:

  • You who need to eat, drink, or take medication
  • A police officer or other official asks you to

Who is liable to pay the fine for not wearing a face mask at work, the employer or the employee?Last updated on 25th September, 2020

If an employee is required under government guidance to wear a face mask during the course of their employment and there is no applicable exemption, any fine issued would be payable by the employee, not the employer.

Who is exempt from wearing a face mask at work?Last updated on 25th September, 2020

Those individuals who are already exempt from the existing face covering obligations, will continue to be exempt from the new rules. These include:

  • Those unable to put on or wear a face covering because of a physical or mental illness or disability
  • People for whom wearing or removing a face covering will cause severe distress
  • Anyone assisting someone who relies on lip reading to communicate

As an employer, can I force employees to wear face masks at work?Last updated on 25th September, 2020

An employer has a duty of care to its workforce and must take reasonable precautions to protect the health and safety of employees. Employers also have a duty of care towards anyone entering or using their place of business, such as visiting clients or customers.

This means that if an employer reasonably believes that wearing face masks at work is appropriate and necessary, it can issue an instruction to employees to this effect and employees should abide by this as far as possible.

However employers should be cautious about introducing and enforcing a policy across its business which requires its staff to wear face masks as there is the risk of unlawfully discriminating against people who are exempt from wearing face coverings or have legitimate reasons for not doing so. An employer should also consider the duty to make reasonable adjustments for disabled employees and discuss any concerns raised by employees who do not want to or feel unable to wear a mask.

If an employee refuses to wear a face mask at work, can I discipline or dismiss them?Last updated on 25th September, 2020

In appropriate cases, disciplinary action and then dismissal may be fair if an employee refuses to wear a face covering in the workplace. For example, if this is in breach of the government guidance or if  employer has issued a reasonable management instruction to this effect due to an identified health and safety risk.

It is important that employers use a fair and reasonable procedure when deciding whether to discipline and/or dismiss an employee and that its actions does not unlawfully discriminate against employees who have legitimate reasons for not wearing masks, such as those individuals who have health conditions like asthma.

Can an employee in a public facing role refuse to interact with a customer who is not wearing a face mask?Last updated on 25th September, 2020

In some circumstances, visitors and customers are required to wear face coverings, such as those travelling on public transport, shoppers and museum visitors. The government guidance states that:

  • businesses must remind people to wear face coverings where mandated; and
  • premises where face coverings are required should take reasonable steps to promote compliance with the law.

As part of their duty of care to employees and to uphold a relationship of mutual trust and confidence, employers should consider how employees can ensure that visitors and customers comply with the rules and provide their staff with guidance. They must also seek ways to protect their employees both from the risks of those customers not wearing face masks and potential abuse from customers or visitors who decline to wear a face covering. This may include having signs in place requiring customers and visitors to wear a mask and allowing staff to refuse to serve customers if they do not follow the rules.

However, it is ultimately the responsibility of the police, security and public transport officials to remove customers from premises where they are not complying with the rules on face coverings.

The police and Transport for London have been given greater powers by the government to take measures if the public do not comply with the law relating to face coverings without a valid exemption, such as refusing to wear a face covering. This includes issuing fines which have now been increased to £200 for the first offence (and £100 if paid within 14 days). Transport operators can also deny access to their public transport services if a passenger is not wearing a face covering, or direct them to wear one or leave a service.

Other considerations

What can I do as an employer if employees are known to be breaking the local lockdown rules?Last updated on 25th September, 2020

This will depend on the particular facts and the employee’s circumstances but an employee should co-operate with the employer so far as is necessary to enable compliance with any statutory duty or requirement relating to health and safety.

In addition, conduct outside of work can result in an employee’s dismissal if the conduct pertains to the employment relationship. If an employee breaches their lockdown rules and it affects their ability to work, such as it being no longer safe for them to attend work, or the reputation of the employer, these may be grounds for disciplinary action and subsequent dismissal.

If an employee works with vulnerable people who are at high risk of catching coronavirus, can the employer require them to limit their activities outside of work?Last updated on 25th September, 2020

It is unlikely that an employer can place such a requirement on staff without infringing the employee’s privacy. If the employee is acting in accordance with the rules, limiting their activity would likely be considered unreasonable.

If an employee has had a coronavirus test, can we require them to disclose evidence of their test results?Last updated on 5th January, 2021

Obtaining an employee’s Covid-19 test result will amount to processing personal data for the purposes of the General Data Protection Regulation 2016/679 (GDPR) and information about an employee’s health is a special category of data (sensitive personal data under the Data Processing Act 2018 (DPA)).

In accordance with the GDPR and DPA, there must be lawful grounds for processing such information. Most employers rely on employees’ consent to obtain medical information and process sensitive personal data and if the employee is unwilling to give consent, you will not normally be entitled to the information.

Special category data can be processed lawfully if it is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the data controller. Employers may be able to require an employee to disclose their Covid-19 test if there is a substantial public interest, such as ensuring that the employee self-isolate if they have a positive test. However, there is a risk that this measure could be considered disproportionate particularly if it is enforced on all employees as a blanket measure.

Flexible furlough

VIDEO: Flexible furlough – how will it work in practice?Last updated on 4th March, 2021

As of 1 July, employers have been able to bring back to work on a part-time basis any employees who have been previously furloughed, and can still claim under the Government’s Coronavirus Job Retention Scheme (CJRS) for the hours the employee doesn’t work.

The ability to flex employees on and off furlough depending on the needs of the business is welcomed by employers. When flexible furlough was first introduced, the ability to furlough further employees came to an end on 10 June 2020 and there were a number of steps that an employer needed to consider in order to take advantage of the flexible furlough option.

Our employment partners Edward Nuttman and Caroline Shafar take you through the updated guidance and provide you with our view on the practical and legal steps that you will need to take to take advantage of flexible furloughing in your workplace.

The webinar was recorded on Tuesday 16th June.

Read more about this

What is the Flexible Furlough Scheme?Last updated on 16th June, 2020

The Flexible Furlough Scheme, ‘FFS’ an unfortunate acronym, allows employees to work for some of the week and be furloughed for the rest.

When does Flexible Furlough start?Last updated on 4th March, 2021

The Flexible Furlough Scheme was introduced from 1 July 2020 and is due to come to an end on 30 September 2021.

Is there a cap on the number of employees on Flexible Furlough?Last updated on 16th June, 2020

Be careful, there is now a cap on the number of employees you can have on furlough at one time.

The number of employees you can claim for in any claim period starting from 1 July cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June 2020. So this cap is going to be specific to each employer.

It may catch out, in particular, employers who had been rotating employees on furlough.

How do I set the hours that my employees will work under the Flexible Furlough Scheme?Last updated on 16th June, 2020

Employers and employees can decide the split of the hours of work and the hours of furlough. There is no maximum or minimum requirements. You can change the arrangement, by agreement, from time to time.

When claiming for employees who are flexibly furloughed, you should not claim until you are sure of the exact hours they will work during the claim period.

Do you need a new written agreement for Flexible Furlough?Last updated on 16th June, 2020

You should already have a written furlough agreement with your furloughed employees, but if you move them to flexible furlough then you need a new agreement that confirms the new furlough arrangement.

So, you’ll need to speak to your employees and confirm the hours of work with them in writing (or reach a collective agreement with a recognised Trade Union.

As before, an employee does not need to provide a written response. But the agreement needs to be documented in writing.

What records do I need to keep for Flexible Furlough?Last updated on 16th June, 2020

You will need to keep a copy of the written agreement for a period of 5 years. If the hours of work change from that which you initially agree, you are likely to need something new in writing to cover each separate arrangement.

You should also keep records of how many hours your employees work and how many hours they are furloughed (i.e. not working). You must keep these records for 6 years, together with a record of the amount claimed, your claim reference number and your calculations.

What is the minimum period for Flexible Furlough?Last updated on 25th September, 2020

It has now changed. Instead of being 3 weeks, it is now technically any period. However, 7 days is the minimum claim period you can now make.

What is the claim period for Flexible Furlough?Last updated on 4th March, 2021

Employers had until 31 July 2020 to make any claims for claim periods up to 30 June 2020. That was the end of the old scheme.

From 1 July 2020, claim periods must start and end within the same calendar month and must be for at least 7 days unless you are claiming for the first few days or the last few days in a month.

You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.

For example, if an employee is furloughed for 7 days spanning a month. You can claim the last 3 in one month, and 4 from the next.

The crucial point is that you cannot make claims that cross calendar months.

The first time that you could make a claim for days in July 2020 was 1 July 2020. You could not claim for periods in July 2020 before this point.

What amount do you claim under the Flexible Furlough Scheme?Last updated on 16th June, 2020

You will claim a pro rata’d amount of 80% of salary, based on the proportion of hours not worked out of the employee’s normal working hours (their “usual” hours).

There are 2 ways to calculate an employee’s usual hours, depending on whether they have fixed or variable hours/pay:

  • For those with fixed hours/pay, you take the number of hours worked in the pay period before 19 March 2020.
  • For those with variable hours/pay, you take the higher of:
  1. the average number of hours worked in the tax year 2019 to 2020 or
  2. the corresponding calendar period in the tax year 2019 to 2020.

If employees are paid per task or piece of work done, you should work out the usual hours for these employees in the same way as for other employees who work variable hours, if possible.

When you calculate the usual hours, you should include any hours of leave for which they were paid their full contracted rate (such as annual leave) and any hours worked as overtime (but only if the pay for those hours was not discretionary).

Can you still have people on furlough leave full-time after 1 July 2020?Last updated on 4th March, 2021

Yes. You can continue to fully furlough employees until 30 September 2021 (but from between 1 August 2020 and 31 December 2020 and from 1 July 2021 you need to contribute to the cost). If on full-time furlough, employees continue not to be able to undertake any work for you. As before, they can undertake training, or volunteer or work for another employer or organisation (if contractually allowed).

What are the holiday rules for someone on Flexible Furlough?Last updated on 8th July, 2020

Employees continue to accrue leave during furlough (whether they are on full furlough or flexible furlough) and can take leave during periods of Flexible Furlough (so long as you top the grant up to full pay for any days taken as holiday).

Government guidance has been updated to state that “Employees should not be placed on furlough for a period simply because they are on holiday for that period.” If a period of furlough happens to coincide with an employee’s holiday then you should ensure that there are business grounds to support furlough being used in that instance so that it isn’t just being used as a means to fund holiday utilisation.

Can an employee still do volunteer work when on Flexible Furlough?Last updated on 4th March, 2021

An employee on Flexible Furlough can take part in volunteer work during hours which you record your employee as being on Flexible Furlough as long as it is for another employer or organisation.

To be clear, if on Flexible Furlough and you’re claiming the grant for them, then they cannot work for you.

As people work part-time and ease back into the business, this is likely going to be a key risk area. You need very clear lines as to working time and non-working time. No replying to emails on days off.

Can an employee still do training when on Flexible Furlough?Last updated on 16th June, 2020

Employees on Flexible Furlough can engage in training during hours which you record your employee as being on furlough, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation or a linked or associated organisation.

Where training is undertaken by furloughed employees during hours which you record your employee as being on furlough, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time.

Can employees on Flexible Furlough work as union or non-union representatives or as pension trustees?Last updated on 16th June, 2020

Employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers. However in doing this, they must not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation.

Employees who are pension scheme trustees or trustee directors of a corporate trustee may also undertake trustee duties in relation to the pension scheme. However, a professional, independent pension scheme trustee who has been furloughed by the independent trustee company cannot undertake trustee work that would provide services to or generate revenue for, or on behalf of, the independent trustee company or any organisation linked or associated with that independent trustee company during hours when they are recorded as being on furlough.

Can employees who are shielding be placed on Flexible Furlough?Last updated on 16th June, 2020

Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed after 1 July 2020, as long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.