A labor law attorney clearly explains how the government recently introduced Coronavirus Job Retention Scheme works and what it means for companies and vacationers.
The Corona Virus Job Retention Scheme is designed to help companies that would otherwise be forced to fire staff in the face of the unprecedented disruption caused by COVID-19.
Any company with a PAYE system in place on 28 February 2020, regardless of size or industry, can benefit from the system, with the government reimbursing employers up to 80% of their employees' wages, up to a maximum of £ 2,500 per month plus the employer's NICs and the contributions to the automatic registration of the pension.
Employees with agency contracts and flexible contracts or contracts without working hours can also benefit from the system. The system also includes workers who have been laid off since February 28, 2020 when they are reinstated by their employer.
Vacation workers: what does that mean?
Companies have to "determine affected employees as employees on leave and inform their employees about this change". However, employers must continue to respect labor law, which means that once the workers whose jobs have been at risk are identified, they must agree to these workers that they will be "on leave".
Given the current exceptional situation and the alternative to vacation, it is likely that most employees will agree to the terms.
For those workers who disagree, they either have to take unpaid leave indefinitely, or employers are likely to have to take the layoff route. It should be noted that employees on leave are nominated by the employer – an employee cannot determine himself.
Employees who were hired on or after March 1, 2020 are excluded from the scheme, presumably to prevent people from "playing" the system by hiring family members after the scheme is announced and then taking leave.
However, companies that have fired people since February 28, 2020 can hire them again and then take them off. In order to qualify for a payment under the Job Retention Scheme, an employee must have at least three weeks' vacation to prevent employers from putting employees on a “rota” vacation. H. One week of vacation, one week off.
Who can take leave?
Normal labor law continues to apply, so employers must not discriminate when deciding who they want to take off. Employees who return to work after a period of absence from illness or self-isolation may take leave, but they cannot take leave while in a period of absence from illness or self-isolation.
The holiday will only take effect when this period has expired. However, employees who "shield" are entitled to vacation. Workers on maternity leave can take leave if they agree to return to work early or to take parental leave together. Alternatively, they remain in the statutory maternity allowance, if applicable, and are only granted leave after their return.
If you agree to changes and switch to vacation status, it is important to note that normal labor law procedures apply. Employers must be careful not to discriminate against workers when deciding who to offer vacations to.
Vacation workers stay busy but are not allowed to work
Provided that the designated employee has agreed to be on leave, he cannot do any work for his employer. If the employee continues to work, even if he has fewer hours, he is not entitled to the program. The good news for employees on leave is that they can volunteer or attend training, provided that neither activity generates income for their employer. Whether people can use this while confining themselves to their home is of course a completely different matter.
How will it work?
In addition to wages, the government pays the related labor costs, including pension contributions and NICs (but no commissions or bonuses) while on vacation. All employees on leave remain employed by their employer for the duration of the system.
Employers can make up for the missing 20% of their employees' salaries, but that's their choice (or ability to pay). There is no legal obligation for employers to increase the salary to 100%, but all contractual clauses regarding retention of salaries and deductions should be taken into account when making this decision.
For those on vacation, their employment status changes, but their employment record remains constant.
Employers must provide the HMRC with a list of employees on leave. Employers pay their workers through PAYE as usual and then apply for funding every three weeks (not weekly) to cover 80% of their wages (up to £ 2,500 gross).
You will receive a grant from the HMRC to cover the lower amount of 80% of an employee's regular wages or £ 2,500 per month, as well as the related employer NICs and minimum contributions to the employer's pension for automatic registration for this subsidized wage. Fees, commissions and bonuses should not be included.
For employees whose pay varies, the 80% is based on the higher value of:
- earnings in the same compensation period of the previous year; or
- the average income over the past 12 months (or less if you worked for less).
If workers who have paid the minimum wage are on leave, the fact that 80% of their income reduces their wages below the NMW does not violate the law because people are only entitled to the NMW when they are working. However, you can claim the NMW if you complete an apprenticeship.
The HMRC system, through which payments can be made, should be operational by the end of April. The program is expected to run for three months, subject to review.
About the author: Tina Chander is a partner in the leading law firm Wright Hassall in Midlands and deals with contentious and non-contentious labor law issues. It works for employers of all sizes, from small companies to large national and international companies. She advises on all aspects of employment litigation and appeals.