Budget 2020 - HR summary

The inevitable focus of the March 2020 Budget are the proposals on sick pay in light of the COVID-19 virus but there are other matters of note for HR.

Sick pay

As well as temporarily allowing SSP to be paid from the first day of sickness absence (rather than the fourth day) for employees who have COVID-19 or have to self-isolate, the Budget contains other measures to widen the scope of SSP and support employers.

SSP has temporarily been extended (from 13 March to 13 November 2020) to cover:

  • employees who are unable to work because they have been advised to self-isolate, and
  • employees caring for those within the same household who display COVID-19 symptoms and have been told to self-isolate

There will be a temporary amendment to the medical evidence/fit note rules for the duration of the outbreak - those advised to self-isolate will be able to obtain a notification via NHS 111 (rather than from a GP) which they can use as evidence for absence from work.

To support employers the government will refund eligible SSP costs with the criteria being as follows:

  • the refund will be limited to two weeks per employee
  • employers with fewer than 250 employees will be eligible
  • the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences, but should not require employees to provide a GP fit note
  • the eligible period for the scheme will start from the day on which the regulations extending SSP to self-isolators come into force
  • while existing systems are not designed to facilitate such employer refunds for SSP, the government will work with employers over the coming months to set up a repayment mechanism for employers as soon as possible

For those who don’t qualify for SSP (e.g the self employed and those earnings less than the lower earnings limit):

  • Employment and Support Allowance (ESA) will be payable for people directly affected by COVID-19 or self-isolating according to government advice for from the first day of sickness, rather than the eighth day.
  • People will be able to claim Universal Credit and access advance payments where they are directly affected by COVID-19 (or self-isolating), without the current requirement to attend a jobcentre.
  • For the duration of the outbreak, the requirements of the minimum income floor in Universal Credit will be temporarily relaxed for those directly affected by COVID-19 or self-isolating according to government advice.

See also our guide - Dealing with Corona Virus in the Workplace.

National Minimum Wage

As well as the already announced increases to the National Living/Minimum Wage, the Low Pay Commission has been asked to make recommendations with the view of reaching a National Living Wage (NLW) of two-thirds of median earnings by 2024, provided economic conditions allow. Following recommendations made by the LPC, the NLW will apply to workers aged 23 and over in April 2021, with a target for it to apply to workers aged 21 and over by 2024.

Neonatal leave and pay

The Budget confirms an intention (announced in a July 2019 consultation) to create an entitlement to neonatal leave and pay for employees whose babies spend an extended period of time in neonatal care, providing up to 12 weeks’ paid leave. There is no date for this but from the Budget’s policy costings, it appears that this won’t be operative until the tax year 2023-24.

Carers’ leave

The Budget confirms an intention to consult on the design of carers’ leave: a new in-work entitlement for employees with unpaid caring responsibilities, such as for a family member or dependents.

Veterans

To support the employment of veterans, the Budget confirms that there will be a National Insurance (NIC) holiday for employers of veterans in their first year of civilian employment. A full digital service will be available to employers from April 2022; however transitional arrangements will be in place in the 2021-22 tax year which will effectively enable employers of veterans to claim this holiday from April 2021. The holiday will exempt employers from any NIC liability on the veteran’s salary up to the Upper Earnings Limit.

Welfare counselling

The government will, from April 2020, extend the scope of non-taxable counselling services to include related medical treatment, such as cognitive behavioural therapy (CBT), when provided to an employee as part of an employer’s welfare counselling services.