Covid-19 employer HR update - Job Retention Scheme and holiday pay
Posted on: 15th May 2020 by: Demos HR Solutions
The Government has extended the Coronavirus Job Retention Scheme (CJRS) for employers to be able to claim up to 80% of furloughed staff wages (maximum £2,500 per month per employee) to 31st October 2020.
The current scheme will run as it is until 31st July and changes will come into effect on 1st August. Whilst we await further details on what the changes will be, some of the information already provided by the Chancellor, Rishi Sunak include:
- Furloughed staff should be able to return to work part time from 1st August.
- Employers will be asked to pay a percentage towards the salaries of furloughed staff from 1st August.
Over 7.5 million jobs have been saved with staff being furloughed, and over £10billion has been claimed by businesses from the CJRS grant.
Further guidance on employee annual leave
Workers who have been placed on furlough will continue to accrue statutory holiday entitlements.
If a worker on furlough takes annual leave, their employer must calculate and pay the correct holiday pay. Where this calculated rate is above the pay the worker receives while on furlough, the employer must pay the difference. However, as taking holiday does not break the furlough period, the employer can continue to claim the 80% grant from the government to cover most of the cost of holiday pay.
The government passed new emergency legislation to ensure businesses have the flexibility they need to respond to the coronavirus pandemic and to protect workers from losing their statutory holiday entitlement. Workers can therefore carry up to 4 weeks' annual leave forward over 2 years after the business's current holiday year ends, only where the impact of coronavirus means that it has not been reasonably practicable to take it in the current holiday year.
The latest update allows employers to be able to require staff to use their annual leave whilst on furlough, however, not if the worker is under any restrictions such as having to socially distance or self-isolate, which would prevent the worker from resting, relaxing and enjoying leisure time (i.e. the purpose of taking annual leave).
Three tests to pass before allowing your employees back to work
Whilst it is vital for many businesses to get their companies up and running again, the Chartered Institute of Personnel & Development (CIPD) has urged employers to consider three important factors before allowing their staff back to work once the Prime Minister issues further guidance on lifting the lockdown.
Is it essential? If working from home has proved effective to date, then is it worth continuing this option?
Is it safe? If working from home isn't an option and the employee must return to the work environment, it is your duty of care to ensure safety and wellbeing. The Government have issued some really useful guidance on conducting a risk assessment for your business including a free poster you can download here.
Is it mutually agreed? Have you spoken with your staff to consider their concerns and to perhaps agree a plan of phased return for example?
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