Coronavirus and pay
In this guide on coronavirus and pay topics covered include statutory sick pay, dependency leave, reductions in pay, lay-offs and redundancy.
Statutory sick pay
Employees earning at least £118 per week are entitled to statutory sick pay and it is set at £95.85 each week.
Statutory sick pay is paid for up to 28 weeks.
The government has confirmed that statutory sick pay, for those eligible, will be available from the first day of sickness. Up until now the first three days of sickness, known as waiting days, are unpaid unless the employee has a contractual entitlement to sick pay.
If the NHS 111 service advises an employee that they should self-isolate the employee will be entitled to statutory sick pay, subject to eligibility.
If, however, the employee is not ill but the employer asks the employee to stay away from work then their employer should pay them their usual salary.
Although the self-employed would not be entitled to statutory sick pay they may be entitled to employment and support allowance and universal credit. The government has announced that the self-employed will be able to access universal credit up to the value of statutory sick pay.
Employees are allowed time off to deal with an emergency involving a dependant.
A dependant is defined as a spouse, partner, child, grandchild, parent, or someone who depends on the employee for care.
Examples could include if, for example, a spouse falls ill and needs immediate support or there is a sudden childcare problem to attend to.
This dependency leave would be unpaid unless the employee has a contractual entitlement to be paid (or the employer paid on a discretionary basis).
Can an employer cut an employee’s salary?
An employer cannot unilaterally change an employee’s terms of contract, including salary, without the consent of the employee. An employee may decide to accept a reduction in pay if, for example, this could reduce the risk of the employee being made redundant. An employee would not though have to accept the proposed cut. If an employer reduces the employee’s pay without their agreement the employee could continue working but make it clear that they are protesting. Alternatively, an employee could potentially resign on the basis that the employer is fundamentally breaching their employment contract. Depending on their length of service, various claims could be considered.
Be aware that there is an option for an employer to be able to reduce an employee’s salary. If the employer has a sound business reason to reduce pay the employer could offer the employee new terms. The employer would first have to carry out appropriate consultation and then make it clear that if the employee did not accept the change their employment would be terminated. A subsequent dismissal could then be fair.
If the workplace is temporarily shutdown employers must still pay employees their salary unless the terms of the employment contract permit the employer to lay-off staff. In such cases the employee would be entitled up to £29 for five days in any three month period.
There is new law which has been introduced. The government has announced a coronavirus job retention scheme. It has stated that it will cover 80% of wages for employees not working but being kept on payroll rather than being made redundant, up to £2,500 a month.
It is important that employees should inform their employers about this scheme in case firms are unaware. This scheme is aimed at avoiding redundancies.
An employee who is made redundant and has at least two years’ continuous service with their employer will usually be entitled to a statutory redundancy payment. Statutory redundancy payments are calculated by reference to age, length of service and earnings, though there are caps.
Generally, an employee with at least two years’ continuous service could have a claim for unfair dismissal. An employer would be obliged to consult with the individual before reaching a decision, carry out a fair selection if appropriate and consider suitable alternative roles, Depending on the number of proposed redundancies, collective consultation may be required,
Employees could have other potential claims too.
Grants for the self-employed
The government has announced that the self-employed (earning up to £50,000) 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.
The grants will initially cover three months, backdated to March 2020, but will not be available until June 2020.
This guide is intended for guidance only and should not be relied upon for specific advice.