Information is continuing to emerge on COVID-19 and the resulting legislative changes being instituted in the UK. We have compiled a list of important updates for British employers to be aware of. Our teams are closely monitoring the situation and will continue to provide the latest updates to keep you informed.
COVID-19 Updates - United Kingdom
Last Updated – March 31, 2020
Employers must provide eligible employees with Statutory Sick Pay (SSP) if that employee is unable to work due to illness. SSP equates to at least £94.25 per week. Employer must make payments to employee for up to 28 weeks. If the employee illness is COVID-19, the SSP begins on the first day of illness. If the employee has a separate illness, the SSP does not begin to be paid out until the fourth day the employee is out sick. In this case, there is a period of three “waiting days”.
To qualify for SSP, an employee must:
- be classified as an employee and have done some work for the employer
- earn an average of at least £120 per week
- have been ill for at least 4 days in a row (including non-working days)
The amount of time the employee can receive SSP is dependent on the illness, or severity of the situation. The employee must notify the employer prior to going on sick leave in order to receive SSP.
An employee is not eligible to receive SSP if they:
- have already received the maximum amount of SSP (28 weeks)
- are getting Statutory Maternity Pay
Employers with fewer than 250 employees (as of February 28, 2020) are eligible to receive reimbursement for employee sick pay leave if sickness is linked to COVID-19. To receive reimbursement, employer must record employee absences and payments made and provide employee medical certificate. If deemed eligible, employer is entitled to receive two weeks of sick pay reimbursement for each employee of leave due to COVID-19.
Tax and Loans
VAT payments will be deferred for the next three months.
Employers have access to business loans of up to £5m, interest-free for the first six months. These loans are 80% underwritten by the HM Treasury.
Employees unable to work due to the impact of COVID-19 may receive up payment from the UK government of up to 80% of their salary. Maximum payment period is three months and maximum payment is 2,500 GBP per month.
Employers may place an employee on unpaid lead if:
- The employer is temporarily unable to provide those employees with paid work opportunities
- There is an provision in the employment contract that allows the employer to place that employee on unpaid leave
Reduced Working Hours
Employers can reduce employee working hours to 80% to avoid dismissal due to redundancy. To do so, employers must consult with the employee or their trade union representatives.
- Employer must provide valid reason for reduction of hours
- Employer must offer employee with alternative solution to reductions of hours
If employee agrees to reduction of hours, the employer must provide written statement detailing alteration to the Terms and Conditions of the employment contract if the employee agrees to reduction of hours
If the work hour reduction is decided through a collective agreement with trade unions or staff associations, the employer must provide employee with written notification of the changes.
If employee does not consent to the reduction of working hours, the employer has the right to dismiss the employee based on redundancy.
Redundancy – Employer Initiated
To avoid the possibility of discrimination, employers must conduct a consultation process with the employee when making that employee redundant. When more than 20 employees are being made redundant within a 90-day period, collective consultation rules must be followed.
Once being made redundant, employees must be allotted the statutory notice period, or payment in lieu of notice. Upon dismissal, employees with over two years of continuous service must be given statutory redundancy payment based on their age and length of employment. Employees receive:
- 5 weeks’ pay for each year of employment after their 41st birthday
- 1 week’s pay for each year of employment after their 22nd birthday
- Half a week’s pay for each year of employment up to their 22nd birthday
Maximum years of employment is 20 years. Maximum weekly pay is £525. Total statutory redundancy payment cannot exceed £15,750. Employers can give additional redundancy pay to employees.
Redundancy – Employee Initiated
Employees moved to short-time working for four or more consecutive weeks, or six or more weeks in a 13-week timeframe, may make a redundancy payment claim upon providing written notice to the employer. Employers can avoid redundancy payment if employee will return to normal working hours with four weeks.