Following the Welsh Government announcement on 19th October 2020 - what does this mean for employers in Wales?
The new restrictions will come into force at 6pm on Friday 23rd October, and will remain in effect until the very start of Monday 9th November 2020. These new restrictions have put in place 5 main points:
1. People will be required to stay at home, other than for limited purposes (including food shopping, exercise, childcare, education and medical services etc), to comply with legal obligations and for work purposes only if it is not reasonably practicable to work from home - more on this below);
2. People will not be able to visit other households;
3. All non-food retail, hospitality businesses, close contact services and events and tourism businesses, such as hotels are to close;
4. Secondary schools will only provide online learning for the week after half term (other than those in years 7 & 8); and
5. Face coverings will remain mandatory.
So what are the rules for businesses?
We are expecting a full list of the businesses that must close shortly however it has been indicated that this will include gyms, restaurants, bars and retail stores but, as was previously the case, supermarkets and essential services will remain open. It is currently unclear as to whether restaurants will be able to offer takeaway service or whether there will be a complete closure/ban. It is worth noting that under the Job Support Scheme (JSS) expansion, closed businesses (for the purposes of eligibility for the scheme) will include premises restricted to delivery or collection only services from their premises (see more below).
What Support is available if your business is included in those that need to close under the circuit breaker rules?
Mark Drakeford has stated that for many businesses, financial support will be 'automatic'. By this he is referring to the funds under the Economic Resilience Fund (in relation to which more details are to be announced later in the week). Every business covered by the small business rates relief will receive £1,000, with small and medium sized retail, leisure and hospitality businesses who have to close receiving up to £5,000, with additional discretionary grants and support yet to be announced.
In addition, Mr Drakeford has also written to the Chancellor in order to ask that Welsh businesses be given early access to the Job Support Scheme (JSS) which is due to start on 1st November 2020. It was stated that this was to remove the need for businesses to juggle this alongside the Job Retention Scheme, however, as most businesses will be aware, the job retention scheme closed for new applicants some time ago and so would only now be available to employers who have previously used it for specific employees. Mr Drakeford has stated that the Welsh government has offered to pay the extra costs to retain staff, but the details of this remain unknown.
So what is the Job Support Scheme (JSS) expansion for closed business premises?
Please see our previous blog on what we know so far about the job support scheme generally here. The government have provided a fact sheet on the expanded scheme, which can be found here
The JSS is due to be available to employers for six months, from 1 November 2020 and will be reviewed in January. We are expecting further guidance and so, so far the details are sparse. As above, Mark Drakeford has asked the Welsh businesses be given early access to the scheme due to the closures required by the circuit breaker.
In addition to the normal eligibility criteria set out in the job support scheme (employers must have a UK bank account and a UK PAYE scheme registered on or before 23 September 2020 with a RTI submission notifying payment to that employee to HMRC having been made on or before this date) the expanded scheme will cover businesses that, as a result of restrictions set by one or more of the four governments in the UK, are legally required to close their premises. This includes premises restricted to delivery or collection only services from their premises.
The scheme will pay a grant to the employer calculated on the number of eligible employees who have been instructed to and cease work at the relevant premises. Employers will only be able to use the scheme for employees who cannot work (paid or unpaid) for that employer. Businesses required to close as a result of specific workplace outbreaks by local public health authorities do not appear to be eligible for this scheme.
The grant per eligible employee available from the UK Government is two-thirds of their normal pay up to a limit of £2100 per month. Further detail on how normal pay is calculated will be set out in guidance (awaited). The employer must use the scheme to cover their employees' wages and pay relevant payroll taxes. The whole of the grant must be used to meet employee costs. The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer. Payments will be made in arrears, reimbursing the employer for the Government's contribution.
Employers must be instructed to and cease work for a minimum of seven consecutive (or calendar) days. If the UK Government does not agree that the scheme be bought forward for Welsh employers, employers will need to act quickly to ensure that they are putting in place agreements between themselves and the employees (after consulting) and that employees cease work for the minimum seven consecutive days before the restrictions are due to be lifted on 9th November.
We understand claims must not overlap and must be made monthly in arrears. These payments will be taxable, and employers will be required to cover employer NICS and automatic enrolment pension contributions in full, where applicable, but are not required to make further contribution to wage costs. However, employers can top up employee pay if they wish.
In line with the rules of the JSS already announced, neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme, however, the test is more stringent in that the expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant. Further details will be set out in guidance which is still awaited.
What do we need to do?
Alike the furlough scheme, employers will need to agree any changes in employment contracts (reducing pay or hours) and to ensure this is agreed in writing for HMRC purposes.
It would be advisable to seek professional advice, particularly when involving changes in employment contracts.
What about working from home?
The guidance on this is clear, and mirrors the restrictions that have been in place across many places in Wales who have been in local lockdown areas- employers must allow people to work from home if they can do so. However, people who are not able to work from home, but are able to work safely in their workplaces, can do so, provided their workplace remains open (i.e. not being legally required to close).
The guidance on the circuit breaker also states that employees should not be required or placed under pressure to return to a workplace setting if there is not a clearly demonstrated business need for them to do so. Employers who are considering requiring their staff to return to workplace settings should first assess whether alternative arrangements could meet the majority of the employer's needs. This should be discussed with staff or representatives of staff. This has been the guidance in Wales throughout the pandemic, and so has not changed with the new restrictions. The Welsh Government has previously made it an offence for employees in local lockdown areas (and previously across the whole of Wales) to leave the place that they are living to go to work, unless it is not reasonably practicable for the person to work from the place where they are living (or similarly to travel to a workplace that is in a local lockdown area). It is unclear whether under the circuit breaker rules, this will be a specific offence across Wales, however we consider this likely.
Should you require support and assistance on the employment law implications of the COVID-19 pandemic, the support available for businesses and HR queries, our experienced advisors will be able to provide practical advice to support your business through the process.
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The information contained in this article is for information purposes only and is not intended to constitute legal advice.