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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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.
Read more about thisGiven 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.
Read more about thisThe government has said that the CJRS will remain open until 30 September 2021.
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.
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details published will result in a serious risk of violence or intimidation to an individual then their details will not be published.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.
Yes, as long as the eligibility criteria are met.
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.
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.
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.
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.
Employees transferring to you under TUPE can be claimed for under the CJRS is each of the following applies:
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.
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.
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.
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.
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.
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.
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.
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.
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.
Yes, employees should receive full pay for any holiday they take.
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.
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.
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.
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:
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.
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.
Whereas the government has recently covered the full 80% of wages (subject to the £2,500 cap):
Employers will need to:
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:
80% of wages is capped at the maximum wage amount which will be calculated in the way it was for CJRS before the extension.
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.
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.
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.
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:
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.
Employees can be furloughed who are unable to work because they:
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).
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.
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.
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
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
Yes, but only for work purposes and where it is unreasonable to do so from home. Work colleagues cannot meet to socialise.
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.
As above, employees must not leave their home unless they have a ‘reasonable excuse’.
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.
Yes. For further guidance, please see our FAQs section on Furlough.
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.
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.
Yes, but be reasonable and sensitive to avoid any claims of associative or indirect discrimination.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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:
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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 .
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:
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.
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.
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.
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.
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:
From 1 July 2020 the furlough scheme has been operating more flexibly.
The key changes from 1 July 2020 were:
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.
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.
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.
Employees will continue to receive 80% of their current wages, up to £2,500 a month.
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:
To watch the video, please click the link below.
Read more about thisYou 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.
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:
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.
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.
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.
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.
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.
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.
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.
Funding audits are being paused and no new audits will be commenced during the lockdown period.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
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:
You can claim for periods of sickness starting on or after:
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:
You must keep the following records in relation to a claim you make under the scheme for three years:
You’ll need to print or save your state aid declaration (from your claim summary) and keep this until 31 December 2024.
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.
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.
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:
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%.
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.
You cannot include the following payments in a claim:
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.
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:
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:
To make a claim you will need:
For claims for those who are flexibly furloughed you will also need:
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.
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:
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.
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.
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 |
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.
The new rules for wearing face masks/face coverings in the workplace introduced on 23 September 2020 are as follows:
You can take off your mask if:
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.
Those individuals who are already exempt from the existing face covering obligations, will continue to be exempt from the new rules. These include:
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.
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.
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:
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.
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.
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.
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.
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 thisThe Flexible Furlough Scheme, ‘FFS’ an unfortunate acronym, allows employees to work for some of the week and be furloughed for the rest.
The Flexible Furlough Scheme was introduced from 1 July 2020 and is due to come to an end on 30 September 2021.
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.
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.
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.
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.
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.
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.
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:
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).
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).
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.
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.
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.
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.
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.