1. Calculation of a Week’s Pay
On 31 July 2020, the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (SI 2020/814) came into force.
The Regulations require calculation of certain statutory payments to be made with reference to a furloughed employee’s normal week’s pay, not their reduced furlough pay.
The statutory payments covered by the Regulations include:
- Notice pay;
- Statutory Redundancy pay;
- Compensation for failure to provide a written statement of reasons for dismissal; and
- Basic and additional awards for unfair dismissal.
The Regulations are complex but in summary:-
- For employees who have normal working hours (and who may have pay that does not vary or whose pay varies with the amount or timing of work done) any reduction in pay as a result of an employee being furloughed is disregarded when calculating a week’s pay.
- For employees who do not have normal working hours, a week’s pay is calculated by reference to their reference salary for claiming furlough pay under the Coronavirus Job Retention Scheme (CJRS), but without the cap imposed by the scheme.
2. Amnesty and Penalties for failure to notify HMRC of CJRS overpayments
HMRC has published two new Compliance Series factsheets covering assessments, interest and penalties where grants under the coronavirus support schemes have been overpaid.
The first is a new Compliance Checks series factsheet on penalties for overclaimed CJRS grants. There is also associated new guidance on what to do ‘If you’ve claimed too much or not enough from the Coronavirus Job Retention Scheme’. Link here.
Employers who find they have erroneously over-claimed in any month can inform HMRC who will adjust the amount paid in respect of their next claim accordingly.
Under the new Guidance, employers also have a 90-day window to self-report overpayments of furlough grants, running from the later of 90 days after 22 July 2020, or 90 days after the day on which the income tax became chargeable (which is explained to be the later of 90 days after the employer received the CJRS grant it was not entitled to, and 20 October 2020). A report can be made using the HMRC Fraud Hotline Information report form using the link above.
After notifying HMRC of the overpayment, it must be repaid within 12 months from the end of the employers’ accounting period in the case of companies, and for sole traders by 31 January 2022. Where the employer is a partnership, one of the partners must include the overpayment amount in their 2020-21 tax return, although all partners will be jointly and severally liable for the amount due. If the overpayment is not repaid within the relevant time period, HMRC may charge a penalty.
Effectively this is a window of amnesty to declare know overpayments and repay them without penalty. To take advantage of this, it would therefore be advisable for Employers to check the eligibility of all employees claimed for, the accuracy of all information submitted in support of their claims, and that all funds received have been properly allocated to the relevant employee. Employers should also double check that employees have not actually worked for any of the hours claimed for each month under the flexible furlough scheme.
3. New policy paper on Job Retention Bonus scheme
On 31 July 2020, HM Revenue & Customs (HMRC) published a policy paper providing further details on the Job Retention Bonus (JRBS), originally announced by the Chancellor on 8 July 2020.
This confirms that the JRBS will be a taxable one-off payment of £1,000 for every employee who an employer has previously claimed for, non-fraudulently, under the CJRS and who remains continuously employed until 31 January 2021.
Special rules apply for Employers in respect of employees who transferred to them where TUPE applies (or would have applied but for the previous employer’s compulsory liquidation).
Employers will be able to claim for employees who:
- Were furloughed and had a CJRS claim submitted for them that meets all relevant CJRS eligibility criteria.
- Have been continuously employed by the employer from the most recent CJRS claim in respect of that employee to 31 January 2021.
- Have been paid at least £520 a month on average between 1 November 2020 and 31 January 2021 (a total of at least £1,560 over the three months).
- Have up-to-date Real Time Information (RTI) records for the period up to 31 January 2021.
- Are not serving a contractual or statutory notice period that started before 1 February 2021.
Subject to these criteria, employers can claim a JRBS for all employees including office holders, company directors and agency workers (including those employed by umbrella companies).
Employers will be able to claim the JRBS from February 2021 through a government website. The policy paper confirms that more details of the process will be published in guidance about the scheme by the end of September 2020. In the meantime, employers should ensure that their employee records are up-to-date, and that they correctly report their employees’ details through RTI. Employers should also make sure their CJRS claims have been accurately submitted and any necessary amendments have been notified to HMRC in accordance with the guidance set out above.
4. BEIS “Working safely during coronavirus (COVID-19)” Guidance Updates
Guidance was first published on 11 May 2020 by the Department for Business, Energy & Industrial Strategy (BEIS) for employers in 14 different categories ranging from office work, retail, industrial, hospitality to the performing arts, that look at different types of work and workplace and consider issues relating to maintaining the safety of workers in each in light of COVID-19.
The Guidance has been updated again to amend and add advice on:-
a) when to wear face coverings, disposing of face coverings and PPE, working from home, mass gatherings, ventilation and work-related travel; and
b) the possible return to work of clinically extremely vulnerable individuals, following the pausing on 1 August 2020 of the shielding regime that applied to them until that date.
5. Increase in minimum self-isolation period to ten days and associated new SSP regulations
On 31 July 2020, Public Health England (PHE) updated its guidance to increase the minimum self-isolation period for COVID-19 from seven to ten days.
The guidance now provides that:
- Those who have symptoms of COVID-19, however mild, must stay at home for a minimum of ten days from the date on which symptoms first began. If a high temperature persists after ten days, individuals must continue to isolate until their temperature returns to normal and seek medical advice.
- Those who have tested positive for COVID-19 but who are not showing symptoms must stay at home for a minimum of ten days from the date of the positive test. If symptoms develop during this period, the ten days should restart from the date symptoms first appear.
- Any person living in the same household as an individual with symptoms of COVID-19 or a positive test result must stay at home for 14 days from the date the first individual became ill or tested positive. If any other person in the household develops symptoms during the 14-day period, they must stay at home for at least ten days regardless of where they are up to in the 14-day period.
Employers will therefore need to be aware of and ready to accommodate the minimum ten-day isolation period whenever a member of staff develops symptoms of COVID-19, tests positive, or lives with someone who develops symptoms or tests positive.
The Statutory Sick Pay regulations have also been amended to tie in with these changes and came into force on 5 August 2020. These confirm that a person isolating as an individual or as part of a household in accordance with the updated PHE guidance will be deemed incapable for work and therefore, provided the usual eligibility criteria for SSP are met, employees complying with the extended isolation requirements will be entitled to SSP for the duration of their isolation.
For further advice or assistance on these issues in the meantime please contact any member of the Employment Team.
This article is accurate as at 08 August 2020, but is not a substitute for legal advice. Please check our COVID-19 Business Support page for up to date developments.