If an employer closes its business, for example, due to the numbers of staff off sick or self-isolating, or because instructed to by the Government, it must pay employees as normal unless the contract provides otherwise. Some employers may have a contractual right to lay-off employees, in which case employees may be entitled to statutory guarantee payments.
If employees can work from home while the workplace is closed, the employer should pay them as normal.
In businesses where working from home is not an option, some employers may find themselves unable to keep up with their contractual obligations to pay employees.
On 20 March 2020, the Chancellor announced a package of support for businesses affected by the coronavirus (COVID-19) crisis, including grants available under the Coronavirus Job Retention Scheme. The scheme is intended to support employers to continue paying employees who would otherwise be made redundant or put on a period of lay-off. It is open to all employers.
Under the scheme, if a worker is designated as a “furloughed worker”, a grant will be available from HM Customs and Revenue (HMRC) to reimburse the employer for 80% of the wage costs relating to the worker, up to a maximum of £2,500 per month.
Employers should consider making use of the scheme as an alternative to making employees redundant or asking them to agree to a period of unpaid leave.
If you’re looking for advice on this subject and want to know how the changes will impact your business, we can carry out an HR audit to identify if you have the correct contracts, policies, and procedures in place.
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