The Coronavirus Job Retention Scheme allows employers to access financial support to continue paying part of their employees’ salary that would otherwise have been laid off due to COVID-19. Essentially, it’s a way of preventing layoffs and redundancies.
If you have any employees who have been placed on a leave of absence, they would be considered a furloughed employee. Changing the status of an employee to a furloughed worker remains subject to existing employment law. Earlier guidance said you had to give employees notice of being placed on furlough. Most recent guidance stated that you have to provide written notice and you must keep a record of this for 5 years.
BrightPay have put together a template letter that employers can use to give to employees that are being placed on furlough leave.
Generally, where an employee’s contract contains a layoff or short term clause, employers should be able to place employees on furlough leave. However, where there is no such clause, it is best advised to get agreement from the employee. Where employers are not topping up the 80% government payment, employers should write to their employees seeking agreement from the employee, as a 20% reduction in salary will be a change to the terms and conditions of their employment.
Given the current situation, it’s expected that most employees would agree to the changes, as the alternative probably works out worse for the employee. That said, employers are advised to get agreement from their employees as part of their furlough leave process.
On another note in relation to employment issues, if an employer is making a decision on who to offer furlough to, equality and discrimination laws apply in the usual way.
Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.
When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment, i.e. redundancy. Any redundancies at the end of this scheme will still have the same statutory obligations attached, as these individuals are still treated as being employed while they are furloughed.
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The rules in relation to the carry over of annual leave have been temporarily relaxed to deal with the coronavirus disruption.
The Government has announced that employees and workers who are unable to take their annual leave due to coronavirus may carry over up to four weeks’ paid holiday into the next two leave years.
The Working Time (Coronavirus) (Amendment) Regulations 2020 will amend the Working Time Regulations 1998 to create an exemption relating specifically to the coronavirus outbreak.
Employees may be unable to take their annual leave for a number of reasons, including:
If an individual leaves their job, either by resigning or due to dismissal during the two-year period, any untaken paid holiday must be added to their final pay. The government has stressed that employers should ensure in so far as possible that workers have adequate opportunity to take their holidays. An individual should not be paid in lieu for holidays unless they are leaving.
The change will apply to most workers including agency workers and those on zero-hours workers.
The temporary change relates only to 4 weeks leave. Employers who do not currently have a policy on the carry over of leave, may decide whether they will allow for extra holidays to be carried over. Extra holidays may include;
The below are some of the key points in relation to the Coronavirus Job Retention Scheme, we will update as more information becomes available.
What is it?
The Coronavirus Job Retention Scheme allows all UK employers to access financial support to continue paying part of their employees salary that would otherwise have been laid off due to Covid-19. It prevents against layoffs and redundancies.
What organisations are eligible?
All UK companies are eligible: limited companies, sole traders who employee people, LLPs, partnerships, charities.
Which employees are eligible?
Furlough leave is available to all employees on a contract, including;
How does it work?
If the employee has been employed for less than a year, employers can claim for an average of their monthly earnings since they started work.
What are the employment issues?
Changing the status of employees to a furloughed worker remains subject to existing employment law. Generally, where an employee’s contract contains a layoff or short term clause employers should be able to place employees on furlough leave. Where there is no such clause, it is best advised to get agreement from the employee.
Additionally, a 20% reduction in salary will be a change in terms and conditions of employment. Where employers are not topping up the government payment, they should also seek agreement from the employee.
Given the current situation and the alternatives for those employees should they not agree, one can expect that most employees will agree. That said, prudent employers will seek to get their employees agreement as part of their furlough leave process.
Please see a sample letter to notify your employee that they have designated as a furlough worker here.
The Government’s Good Work Plan sets out their vision for the future of the UK labour market.
Whilst some of the initiatives are still at the planning and consultation stage, others have been giving legal effect.
On 6th April 2020 three new pieces of employment legislation will come into force.
Under the new legislation the following changes will be introduced:
The General Data Protection Regulation (GDPR) will come into force on 25th May 2018 changing the way we process data forever. The aim of the GDPR is to put greater protection on the way personal data is being processed for all EU citizens. Personal data can be anything from a name, an email address, NI number, bank details etc so as you can imagine employers process a huge amount of personal data on a daily basis. So how will the GDPR affect employers in terms of processing employee data?
Data in the employment context, will include information obtained from an employee during the recruitment process (regardless of whether or not they eventually got the job), it will also include the information you hold on current employees and previous employees. All this information may be saved in hard copy personnel files, held on HR systems or it could be information contained in emails or information obtained through employee monitoring.
Under GDPR your employee’s will have increased rights around their data. These rights will include:
Under the GDPR legislation, where possible employers should be able to provide self-service remote access to a secure system which would allow employees view and manage their personal data online 24/7. Furthermore, the cloud functionality will improve your payroll processing with simple email distribution, safe document upload, easy leave management and improved communication with your employees. By introducing a self-service option, you will be taking steps to be GDPR ready.
Book a demo today to find out how you can benefit from BrightPay Connect.
Those of you who were on any of our recent GDPR webinars will be aware that data controllers (e.g. a payroll bureau client) need to be amending their contracts with any data processors (e.g. the payroll bureau) to accommodate the new requirements under the GDPR.
For those of you who did not get to attend our webinars here is a brief overview.
Whenever a data controller uses a data processor there needs to be a written contract in place. The contract is important so that both parties understand their responsibilities and liabilities. The GDPR sets out certain information which needs to be included in the contract.
Controllers are liable for their compliance with the GDPR and must only appoint processors who can provide ‘sufficient guarantees’ that the requirements of the GDPR will be met and the rights of data subjects (an individual who is the subject of personal data) protected.
Processors must only act on the documented instructions of a controller. They will however have some direct responsibilities under the GDPR and may be subject to fines or other sanctions if they don’t comply.
What does this contract look like?
To comply with the new requirements under GDPR you could either:
Our Advice to Payroll Bureaus
Our advice to payroll bureaus is that when it comes to GDPR you should aim to take an active role in educating your clients about GDPR.
Although the onus is on data controllers to ensure contracts are in place, payroll bureaus looking to get ahead of the GDPR would be well advised to approach their clients and instigate putting the appropriate contracts in place.
Template Data Protection Agreement (DPA)
To assist our customers we have created a template Data Protection Agreement which can be used as an addendum to any existing agreements.
Data protection and how personal data is managed is changing forever. On 25 May 2018 the new General Data Protection Regulation (GDPR) will come into force. The GDPR is a European privacy regulation replacing all existing data protection regulations.
Current data protection legislation in the UK dates back to 1998, predating current levels of internet usage and cloud technology, making it unsuitable for today’s digital economy.
The GDPR will apply to any personal data of EU citizens, regardless of whether it is stored within or outside the EU. Most, if not all companies, process a level of personal data, whether it is customer details or employee details, therefore businesses need to be aware and plan for the new legislation.
What is Personal Data?
The GDPR substantially expands the definition of personal data. Under GDPR, personal data is any information related to a person, for example a name, a photo, an email address, bank details, their personnel file, or a computer IP address.
Ignoring the new legislation is ill advised as there are tough new fines for non-compliance. Companies or organisations found to be in breach of the legislation will face fines of up to 4% of annual global revenue or 20 million Euros, whichever is greater.
GDPR & Brexit
The UK will not have departed the EU on 25 May 2018 and will still be an EU member state. The GDPR will consequently become domestic law and compliance will be mandatory.
Some of the key changes included as part of the GDPR include:
Consent must be clear, distinguishable from other matters and provided in an easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
Breach Notifications; where a breach occurs, the Information Commissioner’s Office and affected data subjects must be notified within 72 hours of the breach coming to light.
Data subjects will have additional rights, including:
If you haven’t already started planning for GDPR click here for guidance on how to prepare.
A range of employment changes are set to come into effect in 2015. Employers need to familiarise themselves with these changes to ensure they are processing payroll correctly.
Some of the most significant changes to be aware of include:
1. Family Friendly Changes
a. Shared Parental Leave & Pay
This is brand new legislation which will apply to parents with babies due to be born/placed for adoption on or after 5th April 2015. Eligible parents will have the flexibility to share statutory leave and statutory pay in the child’s first year. Under the legislation, leave and pay may be taken in discontinuous blocks, and also both parents may take leave and be in receipt of statutory pay at the same time. Whilst using payroll software will ease the burden of processing shared parental leave and pay, there is a rigorous application process that must be completed by employees. To be sure you are ready, employers are well advised to familiarise themselves with the regulations early. Further details are available here.
b. Changes to Statutory Adoption Leave & Pay
From 5 April 2015 there will be no service requirement in order for employees to be eligible to take adoptive leave. Additionally, from 5 April 2015 the Statutory Adoption Pay rates will increase; the first 6 weeks will be paid at 90% of average weekly earnings. After that SAP will be paid at the lower of either the weekly standard rate or 90% of average weekly earnings. This will mirror the Statutory Maternity Pay rates.
Finally, primary adopters will now be entitled to paid time off to attend up to five adoption appointments.
c. Rise of child’s age limit for parental leave
The current right to take 18 weeks’ unpaid parental leave before a child’s 5th birthday is to be extended from 5 April 2015, so that leave can be taken up to the child’s 18th birthday.
2. Automatic Enrolment
Auto Enrolment will continue to be rolled out to all employers. Every UK employer has a date on which workplace pensions automatic enrolment applies to them, i.e. a staging date. For most employers that had between 30 and 58 staff on 1st April 2012 their staging date will be during 2015. However staging dates can vary, so employers are well advised to check out their staging date on the Pensions Regulator site http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx
3. New Fit for Work Service
Due to be rolled out during the year, the Fit for Work Service will offer employers access to free occupational assistance for employees who have been off sick for four weeks or more. Employers will also be able to claim up to £500 tax relief on payments for medical treatment for their employees where the treatment has been recommended under the new scheme.
4. Statutory Pay Rates
The usual shifts in statutory rates of pay are scheduled for 2015. Rates for statutory maternity, paternity, and adoption pay will increase from 5 April 2015, as too will statutory sick pay rates. Any changes to the national minimum wage rates will be effective from 1 October 2015.
5. NIC and Under 21s
The abolition of employer NICs for Under 21s comes in to effect from 6th April 2015. Employers will not be required to pay Class 1 secondary NICs on earnings up to £815 per week, for employees who are under the age of 21. Class 1 secondary NICs will continue to be payable on all earnings in excess of £815 per week. This could result in savings to an employer of up to £90 per week for hiring an employee who is under 21!
The UK "living wage" - an hourly rate based on the amount needed to cover the basic costs of living - has been raised by 20p to £7.85, whilst The London Living Wage has been raised from 8.80 an hour to £9.15.
What is the difference between the Living wage and the national minimum wage?
The living wage is an informal benchmark, not a legally enforceable minimum level of pay line the national minimum wage. The national minimum wage is set by the business secretary each year on the advice of the Low Pay Commission. Unlike the living wage, the national minimum wage is enforced by HM Revenue and Customs (HMRC).
The basic idea of the living wage is that these are minimum pay rates needed to let workers lead a decent life.
Does this effect employers?
The living wage is a voluntary wage so employers are not legally obliged to pay it. Nevertheless, it has been adopted by more than 1,000 employers across the country benefitting 25,000 workers. Citizens UK, the community behind the living wage project say that the number of companies paying the rate has doubled in the last year. However, some business groups are not happy with the increase saying some employers might struggle to pay it.
The advice to employers should be to seriously consider the living wage, but only implement it if it is affordable.
As we enter the summer holiday season employers need to ensure that they are paying their employees correctly during annual leave.
A recent decision by the European Court of Justice (ECJ) will impact how some annual leave pay is calculated.
Do you pay employee’s commission? Is the commission calculated based on the amount of sales made or actual work carried out? If yes, according to the ECJ, holiday pay should include commission pay.
The decision was made in the case of Locke v British Gas Trading and Others. Locke was a Sales Representative whose commission made up approximately 60% of his remuneration. After taking two weeks leave in 2011, Locke suffered financially as he was unable to generate sales for the period he was on annual leave.
The ECJ ruled that the purpose of annual leave is to allow a worker to enjoy a period of rest and relaxation with sufficient pay. By not including commission payments with holiday pay, employees are less likely to take annual leave so as to avoid financial hardship.
It has been left to the national courts to determine how to calculate the commission to which a worker is entitled, however the court did suggest that taking an average amount of commission earned over a certain period, e.g. the previous 12 months.
Employers are advised to review their commission policies to establish which, if any, payments need to be included in annual leave pay.