COVID-19 FAQs for businesses

Last updated 03/03/2021
  1. Can I temporarily lay employees off or reduce their hours?
  2. I have had to stop trading due to the coronavirus. What is the government doing to help me meet my wages bill?
  3. What are the rules for apprentices?
  4. Can my employee work for another company when on the Furlough Scheme?
  5. Can I furlough employees more than once?
  6. Can furloughed employees do any work?
  7. What about directors?
  8. What is the position now if my employees are unable to take annual leave?
  9. Can employees take holiday when furloughed?
  10. Can I make an employee take leave whilst they are furloughed?
  11. If an employee is furloughed during their notice period, what do I pay them?
  12. I want to make an employee redundant but they have been furloughed. What do I pay them?
  13. I have made a claim through the CJRS portal. Do I wait until the payment is received before paying my staff? I am concerned it may take a while.
  14. I need to close my company, what do I do?
  15. If an employee contracts COVID-19, what do I pay them?
  16. What do I pay my employees now that schools have closed?
  17. What do I pay my employees if they have been medically advised to self-isolate?
  18. What can I do if my employee refuses to attend work due to fears about coronavirus?
  19. Do my staff have to wear face coverings at work?
  20. Summary of financial support for small businesses

Can I temporarily lay employees off or reduce their hours?

In order to lawfully exercise lay-off or short-time working, the contract of employment must have a clause allowing you to do so. Employees who are laid off or put on short-time working are entitled to pay for days they do no work at all. This is called ‘statutory guarantee pay’ and is the legal minimum an employer must pay.

In this situation, your employees would not receive their normal pay and depending on the length of the lay-off or short-time working, they may be able to claim for redundancy pay. Your employees may be able to claim redundancy pay if they are laid-off without pay or put on short-time for either four consecutive weeks or six weeks within a 13 week period.

I have had to stop trading due to the coronavirus. What is the government doing to help me meet my wages bill?

The Coronavirus Job Retention Scheme which was introduced back in March 2020 and has already supported over 1 million businesses across the country, by providing 80% of salary for employees placed on ‘furlough’ who otherwise could have been made redundant.

The scheme allowed businesses to furlough their staff and provided no requirement for employers to top up the salaries, under the provision that furloughed staff were not able to work in any capacity whilst receiving the benefits.

As of current

The coronavirus Job Retention Scheme has been extended until 30 September 2021. You can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. Claims for furlough days in January 2021 must be made by 15 February 2021 however you can no longer submit claims for claim periods ending on or before 31 October 2020.

Who can claim?

You must have:

  • created and started a PAYE payroll scheme on or before 30 October 2020
  • enrolled for PAYE online
  • a UK, Isle of Man or Channel Island bank account.

Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.

You can only claim for furloughed employees that were employed and on payroll on 30 October 2020. This means you must have made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. This may differ where you have made employees redundant, or they stopped working for you on or after 23 September 2020 and you have subsequently re-employed them.

Flexible Furlough

Under the flexible furlough scheme, employees can work for some of the week and be furloughed for the rest, in proportions decided between you and your employee.

To be eligible for flexible furlough, employees must have been on the payroll on 30 October 2020. Employees do not need to have been furloughed under the furlough scheme previously.

What about sick pay?

You cannot claim for employees whilst they’re off sick and getting SSP, but they can be placed on furlough leave when they are no longer receiving SSP The scheme does not apply if you are looking to reduce an employee’s hours or introduce short term working, and it is important to note that any size business in any sector can apply. If your employee gets guaranteed commission under their contract, you can claim 80% of this back from HMRC as well as the employee’s basic salary but the 80% does not include non-monetary benefits such as the value of health insurance or a company car.

Placing your employees on furlough

Contracts of employment often allow for variation of terms and conditions, however it is rare that the wording will suffice for the variation to be made lawfully. Whilst the guidance on furlough is rapidly evolving, it is strongly advisable for an employer, in writing, to:

  • Confirm the employee’s new status of being placed on furlough;
  • Obtain the employee’s consent to furlough and the reduction in salary;
  • Instruct the employee to cease all work during the furlough period;
  • Obtain confirmation that the employee agrees to cease all work in relation to the furlough period.

You must ensure that you keep a record of the written notification and agreement for five years.

You may have followed the initial guidance (like many businesses) and notified employees rather than getting their consent. This has been recognised and there is a call for a judicial review around this should a business be penalised for not getting consent when following the original guidance.

If your employee refuses to accept the 80% pay then you may be in a position to make them redundant (or utilise a lay-off clause if you have one).

On 28 May 2020, the government launched the new ‘Test and Trace’ system in England. If a person is notified that they have had contact with a person with coronavirus, they will need to self-isolate for 14 days. As a result, the entitlement to statutory sick pay (SSP) has been extended to cover employees that in these circumstances have to isolate.

Furlough document

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It is advisable that you take legal advice if you have any concerns. HMRC is currently in the process of setting up the process. For further information visit the government COVID-19 business support pages.

What are the rules for apprentices?

You can furlough an apprentice and they can carry on training whilst on furlough. But you must ensure they are being paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage, whichever is appropriate at the time they are training. Take care when looking at wages for apprentices and applying furlough particularly if they are paid the national minimum.

Can my employee work for another company when on the Furlough Scheme?

Yes. If your contract of employment with them allows them to work elsewhere during their employment with you, they can work for a different employer whilst you furlough them. This means they could earn 80% with you and 100% for a different employer.

However, under guidance provided on 14 April 2020, to claim furlough you must have agreed with the employee that they will not do any work for you. You will need to check this as it may mean that some employees already furloughed may not fall within the scope of the scheme.

Can I furlough employees more than once?

Yes. Employees can be furloughed multiple times. In respect to furlough up to and including the 30 June, each period of furlough must be for a minimum of three weeks (21 calendar days). As of 1 July 2020 there is no minimum period of furlough however any furlough arrangement agreed between employer and employee and reported in a claim to HMRC must still cover a period of at least one week.

Can furloughed employees do any work?

No. Employees that you furlough cannot do any work for the business which includes providing any service or carrying out jobs that will generate revenue. They can complete any mandatory training that may be needed to ensure they can return to work such as online training.

What about directors?

Company directors can be furloughed but they cannot work other than to comply with their ‘statutory duties’ such as filing accounts and reporting to Companies House. The directors will need to ensure that any decision to furlough fellow directors is documented as a decision of the board.

What is the position now if my employees are unable to take annual leave?

On 27 March, the Government amended the Working Time Regulations 1998 (WTR) to allow workers to carry forward unused holiday for up to two years where they have been unable to take it due to Covid-19.

Can employees take holiday when furloughed?

The position around employees taking holiday whilst on furlough is not abundantly clear but there has been some recent clarification. Employees continue to accrue holiday whilst on furlough and they can still request and take holiday while on furlough. If they do, they are to be paid in the usual way and in accordance with their usual pay, not at a rate of 80% in line with what you can recover under the CJRS. So you will have to ensure they are paid 100% of pay whilst on leave during furlough.

Can I make an employee take leave whilst they are furloughed?

Employees can be required to take annual leave under the Working Time Regulations so long as you give them twice the amount of notice that they are to take notice of the amount of holiday they are to take. So, if you want your employee to take one week off as holiday, you would need to give them two weeks’ notice beforehand.

If you are making decisions around holiday for those on furlough, we recommend that you take advice or at the very least, keep a clear paper trail to record any decisions made and ensure that you discuss them with the employees concerned. Annual leave is intended to be a period of leisure and rest and so employers should consider if any period of absence for self-isolation or illness would prevent them from taking that rest when determining whether to force employees to take annual leave. Read more on GOV.UK.

If an employee is furloughed during their notice period, what do I pay them?

You must pay your employee their full statutory redundancy payment calculated in line with their full contractual pay as opposed to the wage that they were being paid when furloughed. This has now been confirmed in legislation. You must also ensure of course that your employees receive their notice pay or payment in lieu of notice (depending on the contract of employment) and payment equivalent to any accrued and outstanding benefits up to and including the end date i.e. holiday.

I want to make an employee redundant but they have been furloughed. What do I pay them?

You must pay your employee their full statutory redundancy payment calculated in line with their full contractual pay as opposed to the wage that they were being paid when furloughed. This has now been confirmed in legislation.

You must also ensure of course that your employees receive their notice pay or payment in lieu of notice (depending on the contract of employment) and payment equivalent to any accrued and outstanding benefits up to and including the end date i.e. holiday.

I have made a claim through the CJRS portal. Do I wait until the payment is received before paying my staff? I am concerned it may take a while.

Unless you have reached an agreement with your staff to change their payment date, this cannot be changed. You will still have to pay your staff 80% of their wages on the same pay date as this is a term in their contract of employment.

I need to close my company, what do I do?

In this situation, if you cannot furlough your employees and make use of the job retention scheme, you may need to place your employees at risk of redundancy. You will be required to consult with employees and consider ways of avoiding dismissals by way of redundancy.

Your employees may be entitled to redundancy; this is based upon their age, length of service and weekly pay. If you find yourself in this situation, we recommend that you take advice.

DAS customers have access to templates and guides on www.dasbusinesslaw.co.uk to help with the redundancy process, which can be accessed via the activation code in your policy provider’s documentation.

Redundancy superguide

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If an employee contracts COVID-19, what do I pay them?

Statutory sick pay (SSP) is payable if an employee has contracted COVID-19. The contract of employment may provide for enhanced pay. Employees whose incapacity for work is related to coronavirus are eligible to claim SSP from day one of a period of entitlement.

Small employers (fewer than 250 employees) will be reimbursed for any SSP paid in respect of the first 14 days of sickness related to COVID-19.

What do I pay my employees now that schools have closed?

Your employees have a statutory right to unpaid time off (time off for dependents) to deal with disruption relating to schools and they may request leave for this reason. However, employees who are unable to work because they have caring responsibilities resulting from COVID-19 can be furloughed. So, if you have employees that need to look after children and find that they cannot work from home, they can be furloughed but there is no right to this.

You will need to make sure that you still follow an objective review of the workforce when making the decision of who to furlough to avoid any criticism of practices which may be discriminatory.

What do I pay my employees if they have been medically advised to self-isolate?

Employees will be entitled to SSP if they are self-isolating (the contract of employment may provide for enhanced pay). This also applies to employees who are self-isolating as a result of members of their household who have COVID-19 symptoms.

What can I do if my employee refuses to attend work due to fears about coronavirus?

It is likely that many employers have faced this dilemma. Previously a quick resolution to this issue would be to ask the employee to work from home if appropriate. If this is not possible and the employee could reasonably be asked to continue working, assuming that all health and safety and social distancing requirements can be adhered to, then it is possible for you to consider disciplinary action for unauthorised absence which would be unpaid.

The Government have now set out that employers can require employees to return to work where the employer has put measures in place to ensure safety of staff. This is beneficial to employers that need to start bringing the workforce back.

We would always recommend taking legal advice before taking any form of disciplinary action in this area, particularly because an employee who is concerned about health and safety and discloses this to you may be a whistleblower, and treating them detrimentally will result in difficulty for you as an employer.

Employers should consider whether the employee has a disability as any action taken could be regarded as discriminatory. We recommend that before proceeding with action here, you should take advice to ensure you consider all options and avoid issues later.

Do my staff have to wear face coverings at work?

The Department for Business, Energy and Industrial Strategy (BEIS) has provided detailed guidance for specific workplace settings. Employers must make sure that the risk assessment for their business addresses the risks of COVID-19, using BEIS guidance to inform decisions and control measures including close proximity working.

It is important to note that coronavirus (COVID-19) needs to be managed through a hierarchy or system of control, including social distancing, high standards of hand hygiene, increased surface cleaning, fixed teams or partnering, and other measures such as using screens or barriers to separate people from each other.

These measures remain the best ways of managing risk in the workplace, but there are some circumstances when wearing a face covering may be marginally beneficial and a precautionary measure; this will largely be to protect others and not the wearer. Normal policies relating to occupational workwear and PPE will continue to apply.

Staff in indoor settings

Face coverings must be worn by retail, leisure and hospitality staff working in any indoor area that is open to the public and where they’re likely to come into contact with a member of the public. This includes:

  • shops
  • supermarkets
  • bars
  • pubs
  • restaurants
  • cafes
  • banks
  • estate agents
  • post offices
  • public areas of hotels and hostels

If these businesses have taken steps in line with Health and Safety Executive guidance for COVID-19 secure workplaces to create a physical barrier between workers and members of the public then staff behind the barrier will not be required to wear a face covering.

For other indoor settings, employers should assess the use of face coverings on a case-by-case basis depending on the workplace environment, other appropriate mitigations they have put in place, and whether exemptions or reasonable excuses apply.

Employees should continue to follow guidance from their employer based on a workplace health and safety assessment.

Transport workers

Transport workers are not required to wear a face covering by law. However, face coverings offer some benefits in situations where social distancing is difficult to manage. For example, when working in passenger facing roles, including when providing assistance to disabled passengers.

Public health advice is that staff wear a face covering when they are unable to maintain social distancing in passenger facing roles, recognising that there will be exceptional circumstances when a staff member cannot wear a face covering, or when their task makes it sensible (based on a risk assessment) for them not to wear a face covering.

Additional COVID-19 government guidance for employers and businesses can be found here.

Summary of financial support for small businesses during coronavirus (COVID-19)

UK

England

Wales

Scotland

Northern Ireland

Further information on this topic can be found on DAS Businesslaw. To find out if you have access to this resource, please consult your policy documentation or contact your insurance broker.

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About DAS Businesslaw

DAS Businesslaw can help policyholders create a range of documents such as ready-to-sign contracts (with built in e-signature functionality), agreements, policies and letters.

Customers can also access guidance on a wide range of legal matters such as new legislation, employment issues, crowdfunding, tax and financial planning, and data protection. The service also includes numerous COVID-19-specific templates and guides for businesses.

How to register
  • Visit dasbusinesslaw.co.uk;
  • Enter the voucher code found in your policy documentation into the ‘First time using DAS Businesslaw?’ box and click ‘Validate Voucher’;
  • Fill out your name, email address and create a password, and then validate the confirmation email sent out.

Disclaimer: This information is for general guidance regarding rights and responsibilities and is not formal legal advice as no lawyer-client relationship has been created. Note that the information was accurate at the time of publication but laws may have since changed.