Covid-19 updates: Job Support Scheme, Fines for companies preventing workers from self-isolation

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Working from Home

In light of Boris Johnson’s announcement on 22 September, UK office workers have been encouraged to return to working from home, much of the hospitality industry has been given a 22:00 closing time (along with other restrictions), the use of face coverings has been expanded, and last week saw the rule-of-6 being enforced (with additional and varying rules for Scotland, Wales and Ireland).

These restrictions may last ‘perhaps 6 months’ the Prime Minister said.

In instances where people cannot work from home, such as construction or retail, workplaces should continue to operate as normal with Covid measures in place such as social distancing and the use of face coverings.

Fines of up to £10,000 if companies fail to prevent workers who should be self-isolating from going to the workplace

Under The Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020, which came into force on 28 September, employers have a legal obligation to ensure staff they know have tested positive for Covid-19, or have been in close contact with somebody who has, do not attend the workplace.

Failure to comply with the law is a criminal offence and organisations and workers could face a fine of £1,000 for their first offence, rising to £10,000 for repeated infringements.

Workers are now also required to inform their employer if they have to self-isolate, and face a £50 fine if they fail to tell their employer about this.

This would mean employees would be required to go home – and tell their employer why – if they received a call from a contact tracer or a test result text message while at work. The only form of notification which is specifically excluded is one from the NHS Covid-19 app.

Those on lower incomes who are self-isolating, are unable to work from home and have lost income as a result, may be eligible for a £500 Test and Trace Support Payment.

Those who have been told to self-isolate from Monday 28 September will receive backdated payments once the scheme is set up in their local authority – expected by 12 October.

The Job Support Scheme (JSS)

The Government have unveiled a new Job Support Scheme, which will require employers to give staff a minimum of 33% of their usual hours, with the Government covering some of the wages for the remaining hours not worked.

The six-month scheme will start on 1 November, the day after the existing Coronavirus Job Retention Scheme comes to an end.

The Job Support Scheme (JSS) has been initiated to help protect viable jobs in businesses that are facing lower demand over the coming winter months due to Covid-19. The intent is to help employees remain in employment, and to reduce the possible redundancies due to the current pandemic.

Employers will be expected to continue to pay employees for their time worked, however the cost of the hours not worked will be split between the employer and the government (via the JSS) and the employee (via a wage reduction) resulting in the employee being kept in employment.

Those employers who utilise the JSS will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

HMRC has advised that further guidance will be published shortly.

Who is eligible?

Employers:

  • All employers with a UK bank account and UK PAYE schemes can claim the grant
  • The employer does not have to have used the CJRS to be eligible to claim
  • Large businesses will have to meet a financial assessment test, that the scheme is only available to those whose turnover is lower now than before, due to experiencing difficulties caused by Covid-19. There will be no financial assessment test for Small and Medium Enterprises (SME’s)
  • The expectation is that large employers using the JSS will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant. Further details will be set out in guidance.

Employees:

  • Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020
  • To support viable jobs, for the first three months of the scheme the employee must work at least 33% of their usual hours. After three months, the Government will consider whether to increase this minimum hours threshold
  • Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of seven days.

What does the grant cover?

  • For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government contribution will be kept at £697.92 a month;
  • Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution. The grant will not cover Class 1 employer NIC’s or pension contributions, although these contributions will remain payable by the employer;
  • “Usual wages” calculations will follow a similar methodology as for the CJRS. Full details will be set out in guidance shortly. Employees who have previously been furloughed will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough;
  • Employers must pay employees their contracted wages for hours worked, and the government and employer contributions for hours not worked. The expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense.

What does it mean to be on reduced hours?

  • The employee must be working at least 33% of their usual hours
  • For the time worked, employees must be paid their normal contracted wage
  • For time not worked, the employee will be paid up to two-thirds of their usual wage
  • Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

How can I claim?

  • The scheme will be open from 1 November 2020 to the end of April 2021. Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid monthly
  • Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.

HMRC Checks

  • HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred
  • Employers must agree the new short time working arrangements with their employees, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request
  • The intention is that employees will be informed by HMRC directly of full details of the claim.

The below table shows percentages in relation to the Government funding, based on hours that have been worked.

 

Hours Employee Worked

 

 

33%

 

40%

 

50%

 

60%

 

70%

 

Hours Employee Not Working

 

 

67%

 

60%

 

50%

 

40%

 

30%

 

Employee Earnings (% of normal)

 

 

78%

 

80%

 

83%

 

87%

 

90%

 

Gov’t Grant (% of normal wages)

 

 

22%

 

20%

 

17%

 

13%

 

10%

 

Employer Cost (% normal wages)

 

 

55%

 

60%

 

67%

 

73%

 

80%

Thank you to Serah Goldsworthy of SGHR Associates for providing this update.

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