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March 31, 2020

U.K. Employment Update: Statutory Changes Announced in Response to Coronavirus

This article was updated on April 3, 2020. 

The coronavirus pandemic has led to unprecedented changes and challenges for employers. In response, the U.K. Government has announced various measures to assist U.K. employers, who must now navigate a new array of U.K. employment regulations.

Below is a summary of the key features of the recent U.K. employment law changes as of March 31, 2020:

1. Statutory Sick Pay

Subject to the qualifying criteria, employees on sick leave are entitled to statutory sick pay (SSP) for up to 28¬ weeks. The SSP rate is currently £94.25, rising to £95.85 on 6 April 2020. Four key changes to SSP have been introduced:

  1. SSP is now payable from day one of sickness absence.
  2. Employers with fewer than 250 employees can reclaim the first 14 days of SSP from the U.K. Government.
  3. SSP is extended to individuals who are required to self-isolate by Public Health England, or other relevant body.
  4. ‘Isolation notes’ can be obtained from NHS 111 as evidence of incapacity in lieu of a fit note.

2. Furlough Leave — the Coronavirus Job Retention Scheme

The U.K. Government has introduced a job retention scheme whereby employers will be able to recover a proportion of wages for any employee placed on ‘furlough leave’.

The key elements of the scheme are as follows:

  • An employee or worker can be designated for furlough leave provided they were on the employer’s PAYE payroll at 28 February 2020.
  • Furlough leave must be for a minimum of three weeks, and the employee must not perform any work for the employer whilst on furlough leave.
  • Employers will be reimbursed for up to 80% of wages for furloughed employees, subject to a monthly cap of £2,500 gross base pay per employee. Employers will also be reimbursed for employers’ national insurance contributions and employers’ minimum auto-enrollment pensions contributions.
  • Employers can choose to top up employees’ wages to 100%.
  • Employers will need to obtain written consent from employees for the change to their terms and conditions, particularly if the employer will not be topping up employees’ wages to 100%.
  • Employers will be able to apply for reimbursement through HMRC’s online portal, due to be online at the end of April.
  • The Home Office has confirmed that employers can temporarily reduce the salary of their Tier 2, 4 and 5 visa sponsored workers to 80% or to £2,500 per month, whichever is lower. These reductions must be temporary and the employee’s pay must return back to its original pay once the COVID-19 arrangements have ended. Any reductions made must be part of a company-wide policy to avoid redundancies and all workers must be treated the same.

3. Assistance for self-employed workers

The U.K. Government has also announced a scheme to help self-employed workers who will be able to apply for a grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.

4. Regulations amended to allow employees to carry over four weeks’ annual leave

The U.K. Government has relaxed regulations so that employees can now carry over four weeks’ leave into the following two leave years where it was not possible to take the leave due to the coronavirus pandemic.

5. Emergency Volunteering Leave introduced

Certain employees and workers will be allowed to take unpaid statutory emergency volunteering leave (EVL) in order to volunteer with relevant health and social care authorities. To do so, employees must have an Emergency Volunteering Certificate and give their employer at least three days’ notice. EVL is to be taken in blocks of two, three or four weeks in any one 16-week volunteering period.

6. Extension of IR35 to all businesses deferred

The introduction of the IR35 off-payroll working rules to the private sector has been delayed by 12 months and will now take effect on 6 April 2021.

7. Gender Pay Gap Reporting is suspended

The Government Equalities Office and the Equality and Human Rights Commission have suspended enforcement of the gender pay gap deadlines for the 2019/2020 reporting year. There will be no expectation on employers to report their data, although they may still choose to do so.

Faegre Drinker’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

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