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Coronavirus and the financial impact on employers

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Simon Misiewicz

1st November 2020

Employees and how to cope with Coronavirus

You may be interested to know how Coronavirus also is known as COVID19 affects other aspects of the economy be it self employment, property or other aspects of employment.

Please read up and keep up to date with the Government guidance to employers and employees in regard to Coronavirus: It is also worth keeping abreast of the ACAS employer/employee guidance:

Those who follow advice to stay at home and who cannot work as a result will be eligible for statutory sick pay (SSP), even if they are not themselves sick.

Employers should use their discretion and respect the medical need to self-isolate in making decisions about sick pay.

Anyone not eligible to receive sick pay, including those earning less than an average of £118 per week. The self-employed are able to claim Universal Credit and or contributory Employment and Support Allowance.

For those on a low income and already claiming Universal Credit, it is designed to automatically adjust depending on people’s earnings or other income. However, if someone needs money urgently, they can apply for an advance through the journal.

Employees are entitled to time off work to help someone who depends on them (a ‘dependant’) in an unexpected event or emergency. This would apply to situations related to coronavirus (COVID-19). For example:

– if they have children they need to look after or arrange childcare for because their school has closed

– to help their child or another dependant if they’re sick, or need to go into isolation or hospital

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Employers and how to cope with Coronavirus

There’s no statutory right to pay for this time off, but some employers might offer pay depending on the contract or workplace policy.

Employers should support their workforce to take these steps. This might include:

– agreeing to more flexible ways of working whilst remote calling clients/customers where possible, for example using video or conference calling technology

– If an employee still does not want to go in, they may be able to arrange with their employer to take time off as holiday or unpaid leave. The employer does not have to agree to this.

– If an employee refuses to attend work without a valid reason, it could result in disciplinary action.

Statutory Sick Pay (SSP) when someone is ill or self-isolating because of Coronavirus

The government are paying SSP to any employee for a period of two weeks if they are unable to work because

– They are self-isolating due to Coronavirus or

– ill because of Coronavirus

The employee in question will not need to produce a doctor’s letter. SSP will be paid by the government through your payroll system as a deduction to the employer’s national insurance.

Criteria for Employer's claiming SSP due to Coronavirus.

Employers must

– Been operating PAYE since  19th March 2020

– Had less than 250 employees as of 19th March 2020

COVID19 Financial support given to employers

There are a number of financial support packages that have been readily available for employers, which we have listed below

The first element of government financial support was in the form of Coronavirus Job Retention Scheme also known as CJRS. This came into play in March 2020 and ended in October 2020.

However, due to the health issues caused by Coronavirus Boris Johnson met with government health officials and agreed on a national lockdown in the United Kingdom throughout November 2020. This UK national lockdown would be reviewed again in December 2020.

The Furlough scheme was once more extended as a direct result of the 31st October 2020 meetings that took place between Boris Johnson and government health officials.

Employees would once more be paid 80% of their gross wages up to a maximum of £2,500 through the Furlough Scheme.

The CJRS was then replaced with the Job Support Scheme JSS from December 2020 through to April 2021.

Legal considerations to Coronavirus and the furlough process

Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to obtain an agreement to employment terms. A record of this communication must be kept for five years.

Furloughed staff after Coronavirus

Employers need to determine if staff are to be employed once the furlough period runs out or to make them redundant.

A note on Company Directors that are to be furloughed

Business owners that are salaried directors may be furloughed if they are unable to work or generate revenue as a result of Coronavirus.  Company Directors should not do any type of work that generates revenue or provides services to or on behalf of their company.

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