Big changes will come into effect next month for the millions of workers still on leave due to the coronavirus crisis, as employers will have to start contributing more money to the program.
Here’s what you need to know.
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How does the leave currently work?
Currently, workers on leave who cannot do their jobs due to the crisis receive 80% of their wages covered by the government up to £ 2,500 per month.
Until this month, the government has also covered the cost of national employers’ insurance and pension contributions, although bosses had to start coughing for this from August 1.
This means that employers currently pay around 5% of employment costs.
How do the permissions change from September?
From 1 September, the government’s contribution to the wages of laid-off workers will increase from 80% to 70%, up to a cap of £ 2,187.50 per month.
This means that employers will have to pay 10% of wages to cover the remainder of the 80% of wages paid by the scheme, up to a cap of £ 2,500 per month.
With the September changes, employers’ bills will drop to 14% of personnel costs, according to the government.
What is permission?
The goal of the government’s job retention program is to save one million workers from unemployment due to the coronavirus crisis.
Under the scheme, until August 31, the government will pay 80% – up to £ 2,500 per month – of the salary of an employee who cannot work due to the impact of the coronavirus.
Workers will be kept on the payroll rather than being made redundant.
Until August 1, the government also paid in addition employer contributions associated with national insurance and minimum self-enrolled employer pension contributions, although employers must pay them from August.
The program has been extended until the end of October and can be backdated to March 1, 2020.
It is available to all employees who started a PAYE payroll system on or before March 19, 2020, although it was closed to new entrants in June.
Earlier rules meant that staff could not undertake work for their employer while on leave.
But from July 1, staff members were allowed to return part-time and they must be paid in full for working hours.
From September 1, employers will have to start paying 10% of wages, with the government paying the remaining 70%.
And from October 1, employers must pay 20% of the bill, with the government making up the remaining 60%.
But while workers on leave will see no change in what they get paid – because only who pays is different – the pressure on employers to spit more can push companies to lay off.
MoneySavingExpert.com founder Martin Lewis, for example, has previously warned that employers will start laying off hundreds of thousands of people if they can’t afford to pay.
Can I be made redundant if I am on leave?
Even though time off is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.
But it does not affect your termination rights if you are fired from your job amid the coronavirus crisis.
Your employer must still proceed with a fair termination process.
You will first have the right to be consulted about the termination and to receive statutory termination pay, provided you have been working somewhere for at least two years.
The amount to which you are entitled depends on your age and your seniority, although this amount is capped at 20 years. You will have:
- Half a week’s salary for each full year you were under 22,
- One week’s salary for each full year you are 22 or over, but under 41,
- One and a half weeks of salary for each full year you were 41 or older.
Unfortunately, you will not be eligible for payment if you have worked for your employer for less than two years.
There should be a collective consultation period as well as time for one-on-one consultations if your employer wants to lay off 20 or more employees within 90 days or between them.
You also have the right to appeal the decision on the grounds of unfair dismissal within three months of your release.
If you are made redundant after your company has gone into administration, you can apply for severance pay through Gov.uk.
Does the holiday change again in October?
Yes, the holidays change again in October and there are fears that this will only exacerbate the problems of struggling businesses.
Indeed, from 1 October, the government contribution will increase from 70% of wages to 60% of wages up to a ceiling of £ 1,875 per month.
This will require companies to pay 20% of wages to reach 80% in total up to a cap of £ 2,500 per month.
This means that employers foot the bill for 23% of employment costs before the plan ends on October 31, after which employers will be responsible for 100% of personnel costs.
When does the leave program end?
What is income protection insurance and can you purchase it while you are on leave?
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The government hopes to tackle potential layoffs by launching a new £ 1,000 bonus for employers who pick up workers on leave and employ them continuously until 31 January 2021.
Announced in the July mini-budget, the £ 1,000 bonus will be paid by the government to bosses who pick up workers on leave and pay them at least £ 520 on average each November through the end of January.
Since July 1, workers on leave are allowed to work part-time for their employer while remaining enrolled in the job protection program.