Extended Coronavirus Job Retention Scheme – current furlough scheme
Pay – National Minimum Wage (NMW)
When furloughing an employee who receives NMW, the government and HMRC acknowledge that the calculations and pay reference periods may take an employee wage below the NMW rate and have confirmed this is acceptable on days where an employee is furloughed. If, while on furlough, an employee is required to do training then this should be topped up to current NMW rates.
There are questions regarding employees who got a pay rise over the last couple of months. Our understanding, but this hasn’t been confirmed by the government is, it is not relevant for establishing the pay reference period for HMRC as they are not concerned with pay rises/ or national minimum wage. They are looking at what the RTI information says for each employee as that is the only way they can check out genuine cases and minimise the risk of fraud. Therefore, follow the guidance clearly on this point (but also consult HMRC or payroll as we cannot give more detail at this point).
What Employees are Entitled to under the New Extended Scheme
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 not furloughed before, the last pay period prior to 30 October 2020 provides the basis for calculation. For employees on variable pay or hours, not furloughed before, the average of tax year 2020 to 2021 up to the start of the furlough provides the basis for calculation.
Redundancy – re-hiring employees
Employees can be re-hired if they were on the RTI as at 23 September 2020 but as previously advised, our advice is to NOT re-hire employees as it will invoke other employment law rights that, in our view, is too risky to do and we could not provide our Guaranteed HR advice service to those clients who choose to do this and then face a claim from their employee relating to it.
Sickness absence & Self-Isolation
If your employee is on sick leave or self-isolating as a result of coronavirus, they may be able to get Statutory Sick Pay (SSP) from day one. The Extended Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness or self-isolation.
Short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee. Where an employee has a period of short-term illness/self-isolation they should not be placed on furlough.
If, however, employers want to furlough employees for business reasons, such as reduction of hours (flexi-furlough) or a business closure, and the employee is currently off sick then any employee currently off due to short-term illness/self-solation can also be included. The employee should no longer receive sick pay and would be classified as a furloughed employee.
Employers can furlough employees who are clinically extremely vulnerable, at the highest risk of severe illness from coronavirus or off on long-term sick leave. It is up to employers to decide whether to furlough these employees.
You can claim back from both the Extended Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period of time. When an employee is on furlough, you can only reclaim expenditure through the Coronavirus Job Retention Scheme, and not the SSP rebate scheme. If a non-furloughed employee becomes ill due to coronavirus, needs to self-isolate or shield, then you might qualify for the SSP rebate scheme, where you can claim up to two weeks of SSP per employee.
The Welsh government updated their guidance for extremely critically vulnerable on 22nd December 2020 where they were advised not to leave home for any reason. If they fall within the guidance of the Extended Coronavirus Job Retention Scheme as being classed as extremely critically vulnerable the employer can furlough the employee.
The Northern Irish government update their guidance for critically extremely vulnerable on 26th December 2020 where they were advised not to leave home for any reason. If they fall within the guidance of the Extended Coronavirus Job Retention Scheme for who is being classed as extremely critically vulnerable the employer can furlough the employee.
The UK government has confirmed as part of their announcement on 4th January 2021 that the extremely critically vulnerable in England are now to shield again. The appropriate people will receive a letter in due course confirming they should shield and in turn employers do have the option to furlough these people.
The Scottish government has confirmed as part of their announcement on 4th January 2021 all who will be classed as shielding will receive a letter and this will serve the purpose of a fit note, in order to process any SSP payments an employee is entitled to.
We are awaiting confirmation of who will be incorporated under the shielding group and if it will be the same volume of people as before, we have yet to have this confirmed by the UK government for the purposes for the Extended Coronavirus Job Retention Scheme regulations.
The Xact team will give your business a free of charge health and safety assessment to ensure that you are legally compliant. Please contact the Xact Team to arrange your free consultation by clicking on the button.