Covid employer guidance updates | May 2021

Changes from May 2021 in calculating pay for variable pay employees on furlough

Employers can currently claim up to 80% of their employees' "usual" wages when on furlough (up to a cap of £2,500 a month). The calculation of "usual" wages is different depending on whether the employee has fixed or variable pay and, currently, this includes different treatment for periods spent on maternity/family leave or sick leave. These types of leave are effectively disregarded for the purposes of the fixed pay calculation but are not disregarded with the variable pay calculation.

This can result in variable pay employees receiving a reduced level of furlough pay. However, the government guidance has been updated and now states that, when calculating average pay to check reference salary for variable pay employees, you must exclude time and pay associated with statutory leave and periods of reduced rate paid leave (unless the employee as on one of those kid of leave throughout the entire period used to calculate their wages, in which case you include the time and pay related to that leave).

It is worth ensuring that your payroll team is aware of the upcoming change in order to be certain employees on furlough receive the correct pay and you are claiming the correct amount under the CJRS from 1 May 2021 onwards.

Also remember that, from 1 July 2021, the government contributions will reduce from 80% to 70% and then to 60% for the months of August and September 2021.

Acas provides advice on dealing with employees with Long Covid

Acas has published advice for employers and employees on the treatment of employees who are suffering from Long Covid.

Acas confirms that the usual rules for sickness absence and sick pay will apply if an employee is unable to work due to Long Covid. The options available to employers to help their staff return to work include the following:

  • Arrange and offer occupational health assessments;
  • Look into reasonable adjustments, such as adapted physical workspaces; and
  • Discuss flexible working, phased returns or altered hours as an option to build back up to usual working hours.

The advice also states that it is a good idea for you as the employer to focus on the reasonable adjustments you can make, rather than trying to work out if an employee's condition is a disability under the Equality Act 2010.

We hosted a webinar on what employers need to know about Long Covid on 19 May and the recording is now available. If you would like to watch the recording, please click below and read our article here.

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