National Insurance Increases from 6/4/22

A client has inquired about the Prime Minister’s proposals to raise National Insurance Contributions (NIC) to fund health and social care. They would like to know how it would affect them and what the HR considerations they should have are.

The proposal emphasises that 70% of the money raised from businesses will come from the largest 1% of businesses, while 40% of all businesses will pay nothing extra. The NIC increase will, the Government calculates, cost £255 a year for someone earning £30,000 and £505 a year for someone on £50,000.

Following this announcement, employers like my client will have to prepare their payroll teams for the adjustment from next April, to ensure they are meeting their legal obligations and making the correct deductions from employee wages. It may also be of benefit to send a reminder email to your staff, or update them through normal business channels, so they are aware in advance that there will be a decrease in their take-home pay, due to the increase in national insurance payments.

Some employees will be understandably upset about this but there is no obligation on the client to provide additional benefits or pay increases to cover the difference in net pay. The client can make their staff aware that this was not a business decision, but a necessary step mandated by the Government.

All other contractual entitlements should remain the same. The client will have to assess the financial impact this might have on their business and make adjustments where necessary to ensure its long-term viability. If redundancies or changes to existing terms and conditions are needed, the client must make sure they are following fair processes and fully consulting with staff before taking any action.

The client might be more inclined to hire individuals on a self-employed basis to avoid contributing towards higher NI payments. However, doing so may cause more problems if it is seen that there is an employment relationship in place and the individual is working under the wrong employment status. This could not only lead to a breach of employment laws and tribunal claims but also costly back-payments to the employee and HMRC.

Further changes are expected from April 2023, including recording the increased national insurance rate on employee payslips as a separate “levy” deduction and making this deduction from working pensioners’ wages. Your client should use this time to prepare themselves for the upcoming changes, so they don’t get caught out.

A client wants to know how to deal with burnout in the workplace. They also want a brief explanation of what it means and how to spot the signs.

The term ‘burnout’ has become more prevalent in recent times as employers try to manage the impact that increasing workplace demands have on employees’ health. This has only become more apparent during 2020, when many employees may have faced increased workloads, uncertainty and general pressure due to the outbreak of COVID-19.

According to the World Health Organisation (WHO), common symptoms of burnout include:

  • feelings of energy depletion or mental exhaustion
  • increased mental distance from one’s job
  • feelings of negativism or cynicism related to one’s job
  • reduced professional efficacy.

A key aspect of the WHO’s definition is that burnout only relates to work-related stress, which means that clients are taking the right steps by wanting to know more and acknowledging that they play an important role in prevention. One of the key stumbling blocks is that burnout, and by association work-related stress, can be viewed as ‘part of the job’ in many industries, or a necessity due to the challenges posed by the pandemic.

As burnout is recognised as an occupational phenomenon, it is obvious that it exists and is contributed to by employment, especially in a year where employees have faced the fears, uncertainty and stresses associated with working through a global pandemic.

Not all staff were furloughed, and for those who have worked throughout the pandemic, an increase in workload may have caused signs of burnout to start to show, and impact their performance overall. Clients are therefore best placed to interject and seek to prevent burnout occurring, or to support those who are burnt out.

Clients can do this by:

  • Assessing working hours and workloads for any imbalance and ensure employees have the support they need to meet targets
  • Ensuring employees have the training they need to be able to efficiently carry out their tasks
  • Avoiding creating a situation where staff are pressured into working long hours or taking work home with them
  • Encouraging employees to take their rest breaks and annual leave
  • Ensuring availability of cover during an employee’s annual leave so they don’t feel like they need to “log in” to avoid a pile-up of work then they return
  • Offering flexible working, or working from home
  • Keeping an ‘open door’ policy where employees can discuss any concerns they have.

While some may think that this is a personal syndrome and something for an individual to deal with, this is an attitude that can lead to burnout becoming prevalent in their business and having a significant negative impact on factors such as retention, productivity, and growth.

Pingdemic

As you may know, the easing of restrictions in England has led to thousands of people being notified by the NHS test and trace app to self-isolate for 10 days. This has had adverse effects on a client’s business due to staff shortages. The client would like to know what their options are for dealing with this issue.

Managing an unexpected period of self-isolation can be gruelling but your client may be able to get around this by allowing staff, even though government guidance in England has changed, to work from home during this period if possible. Another option is to consider hiring temporary workers or asking the remaining workforce to split their colleagues’ workload between them. They may also wish to consider whether their staff are eligible to be exempt from self-isolation under the Government’s new rules.

The new rules highlight that “…a limited number of named workers may be able to leave self-isolation under specific controls for the purpose of undertaking critical work only.”

This process is only intended to run until 16 August 2021, when fully vaccinated close contacts will be exempt from self-isolation. Where your client believes the self-isolation of certain key employees would result in serious disruption to critical services, they should contact the relevant government department.

The sectors to which the new rules apply are:

  • energy
  • civil nuclear
  • digital infrastructure
  • food production and supply
  • waste
  • water
  • veterinary medicines
  • essential chemicals
  • essential transport
  • medicines
  • medical devices
  • clinical consumable supplies
  • emergency services
  • border control
  • essential defence outputs; and
  • local government.

In some exceptional cases, there may be critical roles in sectors not listed above which meet the criteria. These will be agreed on a case-by-case basis. Where your client thinks this applies, they should contact the government department with responsibility for their sector.

The Government makes it clear that this policy applies to named workers in specifically approved workplaces who are fully vaccinated (defined as someone who is 14 days post-final dose) and who have been identified as close contacts.

Permission to attend work is, it emphasises, contingent on following certain controls, agreed by the Department of Health and Social Care (DHSC), to mitigate the risk of increased infection.

MANDATORY VACCINES IN CARE HOMES

A client has been in touch about the care home update from the Government. Now that it has been confirmed that care home staff must have the COVID-19 vaccine, the client would like more information about how they can manage staff and any other important information they need to know.

The Department of Health and Social Care (DHSC) has indeed confirmed that people working in CQC-registered care homes will need to be fully Covid-19 vaccinated, with both doses, as a condition of deployment. This change only applies to England as Scotland and Wales have confirmed that they will not be mandating the Covid-19 vaccine for care home staff.

It is currently expected that the law will be made in October 2021. It will not come into force until 16 weeks later; at that point, affected employees must have had both doses of the vaccine unless they are medically exempt. Dependent on the exact date the regulations are made in October 2021, care home workers will have until early 2022 to have had the vaccine. For illustrative purposes, a 16-week grace period from the last day in October 2021 will expire on 20 February 2022.

The law will apply to all workers employed directly by the care home or care home provider, on a full-time or part-time basis, those employed by an agency and deployed by the care home, and volunteers deployed in the care home.

People coming into care homes to do other work, such as healthcare workers, CQC inspectors, tradespeople, hairdressers, and beauticians will also have to follow the new regulations unless they have a medical exemption.

There will also be exceptions for visiting family and friends, under 18s, emergency services, and people undertaking urgent maintenance work. However, there will be no exemption for those who hold a religious belief and refuse the vaccine on those grounds. The Government recognises that in some circumstances, vaccination may not be appropriate during pregnancy and this will be considered in guidance regarding granting exemptions.

Making the vaccine compulsory in care homes may cause significant resourcing problems for affected employers if staff choose not to have the vaccine despite the possibility that they will lose their job and possibly even their chosen career. One important consideration for the client is that, if it comes to terminating employment, a full and fair procedure will still be needed. A change in the law on vaccines in this way does not mean an exemption from normal rules on achieving a fair dismissal.

The client will need to become familiar with which individuals must have the vaccine because this goes further than just those who are directly employed. As it covers agency workers and also volunteers, along with anyone who comes to the home to provide services, it is clear that this will create an extra administrative burden on the client.

Unless employees are medically exempt, anyone working in a care home will be under a legal requirement to have had both doses of the vaccine. Continuing to employ someone who contravenes the requirement is likely to be unlawful. The client will need to redeploy an employee outside of the care home who would otherwise be working in breach of the vaccine requirement, including those who refuse to show proof. It is unlikely though that if employees have had the vaccine, they would be reluctant to show proof. If redeployment is not possible, the employee will need to be dismissed.

Watchdog on workers’ rights

Since the Government confirmed on 8 June 2021 that it will be creating a watchdog to protect workers’ rights, a client would like to know more about this and how it will affect their business.

It is still yet to be confirmed when this new watchdog will begin to operate, however, it will be given powers and responsibilities to combine three bodies, which each cater to different employment law areas, into one. It aims to create a “comprehensive new authority” to ensure that organisations are adhering to their legal responsibilities and that those who “break the rules have nowhere to hide”, namely tackling modern slavery, enforcing minimum wage laws, and offering protection to agency workers.

As part of the announcement, the Government has added that the new watchdog’s powers will be extended to provide a “port of call” for workers. The role of this aspect of the watchdog’s role is, according to the Government, to allow workers to know their rights and blow the whistle on “bad behaviour”. Similarly, the watchdog will offer support to employers, like you client, so they are able to “do right by their employees”. Importantly, the existing Naming and Shaming Scheme – which calls out organisations that fail to pay their staff the correct minimum wage rates, and fines them up to £20,000 per employee – will be managed by the new watchdog.

This Naming and Shaming Scheme will be extended to cover other laws protecting workers’ pay where they are hired through an agency. It is also hoped that vulnerable workers will be helped with issues around holiday pay and statutory sick pay without them having to make a claim to an employment tribunal.

Your client may not need to be too concerned about the creation of this new watchdog as it aims to curb the exploitation of workers. However, your client must keep track of their business procedures to ensure that they do not fall foul of employment law provisions that seek to protect workers’ rights. It is advisable that your client begins to review their business processes and tighten their policies on matters relating to grievance procedures, modern slavery, minimum wage, and more.

Crucially, your client should ensure that employee concerns are listened to, especially where it is observed that the company has not taken steps to safeguard employees’ health and safety in the workplace. In cases such as these, where whistleblowing is concerned, if employees are subjected to a detriment by a manager who believes that they are a ‘troublemaker’ for raising the matter, they can bring an employment tribunal claim against the organisation. Any dismissal on these grounds will also be automatically unfair from day one, which could lead to an expensive compensation award at a tribunal as it considers just and equitable.

 

Voluntary Redundancy

I have been considering making some roles redundant as my business tries to recover from the impact of the coronavirus pandemic. An employee has now come forward to put themselves up for redundancy; What does this mean for my organisation and should I accept it and how?

Voluntary redundancy is a situation where staff put themselves forward for redundancy as an alternative to their employer having to make this decision. Although during a redundancy procedure, a company could ask if any staff wish to be made voluntarily redundant, it is not uncommon for some to put themselves forward without being asked first.

In situations of voluntary redundancy, there are couple of key things you should bear in mind – you do not have to accept a request from an employee who volunteers for redundancy. This is because the final decision for who should be made redundant does ultimately rest with the company. However, it is important to bear in mind that voluntary redundancy can help make managing the redundancy procedure easier for you, if managed carefully.

If you accept this employee’s application for voluntary redundancy, this should be processed in the usual way as staff who have been selected, usually via a scoring exercise, to be dismissed due to redundancy. This means that you should provide written notification that their employment is coming to an end by reason of redundancy and when their last day will be. Any redundancy pay entitlements and outstanding holiday pay should be made clear.

You should keep in mind that if the employee has worked for the company for at least two years, they will be entitled to receive statutory redundancy pay. If their contract provides for an enhanced payment for redundancy, this is the amount they should receive.

The employee should also be provided notice as specified in their contract. In the absence of any enhanced period of notice, this should be at least the statutory minimum notice in place when dismissing an employee, as follows:

  • one week where the period of continuous employment is one month or more but less than two years
  • one week for each year of continuous employment, up to a maximum of 12 weeks, where the period of continuous employment is two years or more.

It seems that you do not already have a policy on dealing with voluntary redundancies. Going forward, you should think strongly about implementing such a policy to make clear that regardless of whether volunteers are proactively sought or not, volunteering for redundancy does not mean that the employee will definitely be made redundant. Volunteering for redundancy simply means they are putting themselves forward to be considered; the final decision over whether to accept the request lies firmly with you.

This is important, as it will allow you to reject applications from employees working in certain business critical roles. Being able to reject applications will also allow you to retain a balanced skilled workforce, especially in the event they receive more applications than originally required.

LONG COVID

With more and more businesses re-opening across the UK and a greater number of employees returning to the workplace, how can I support my staff with long Covid and what could the symptoms be?

 

Given that the Office for National Statistics (ONS) has estimated that over one million people have reported experiencing long Covid, the conciliation and mediation service, Acas, has issued an advice note that may be useful to you.

Firstly, the advice highlights that the symptoms of long Covid are varied and can include:

  • extreme tiredness
  • shortness of breath
  • chest pain or tightness
  • problems with memory and concentration (also known as a ‘brain fog’)
  • difficulty sleeping
  • heart palpitations
  • dizziness
  • pins and needles
  • joint pain.

Other patients have reported depression and anxiety; tinnitus; earaches; feeling sick; diarrhoea; stomach aches; loss of appetite; a high temperature; headaches; sore throat; changes to sense of smell or taste; and rashes.

The advice note also offers practical tips on how employers like yourself can manage the various effects of the condition in a sensitive way, as well a range of options that can help staff get back to work safely. It suggests that employers should:

  • apply the usual rules on sickness absence and sick pay where necessary
  • arrange and offer occupational health assessments
  • look into reasonable adjustments, which can vary from changed hours, to adapted physical workspaces, and
  • discuss flexible working as an option as well as phased returns, which may mean coming back part-time initially to build back up to working usual hours.

As long Covid is a new illness, Acas is also hesitant to state whether it will be considered a disability. However, what is clear is that it may lead to conditions that do fall into this category and you should be mindful of this, alongside the danger of discrimination. The guidance therefore advises employers not to focus on whether long Covid should/can be considered a disability, but instead to prioritise the ways they can help staff to combat the symptoms and return to work safely. To this end, it also cautions against capability procedures until all other options have been considered.

Finally, although disability discrimination may not be a clear result of neglecting to take action, the guidance states that certain groups of people in particular are suffering most from long Covid – including those who are older, from ethnic minority backgrounds, or women – and poor treatment of them in this regard could lead to claims of constructive unfair dismissal.

How to support staff who are going through the menopause.

Our client wants to know how they can support staff who are going through the menopause and if it is a good idea to intervene in what might be a delicate time for employees going through the change.

Whilst is it not advisable for you to confront employees going through the menopause or put them on the spot in any way, it is important that they have a clear and open system for supporting these employees. This ensures that any worker who needs additional support feels able to approach management on the issue and are fully aware of the steps that can be taken by the company on their behalf.

You have a duty to ensure the health, safety and welfare of your employees, and to undertake risk assessments to assess risks that the workplace may pose. In addition, the Equality Act 2010 outlines that employees must not be discriminated against due to any form of disability. Although an employee going through the menopause is not automatically protected by the provisions of the Act, the symptoms that can arise from the menopause may be classed as a disability if they meet the required definition.

To defend against any liabilities, and potentially costly compensation awards, if you take steps to offer support and assistance to all individuals who are going through the menopause, they will experience real benefits. By fostering a workplace where employees feel safe, you are more likely to retain the skills and experience of your employees.

To clearly outline organisational procedures that are in place to support and assist those going through the menopause, it may be useful to create an official policy which may include the following:

  • a general introduction, highlighting what the policy is for and reaffirming your commitment to treating all individuals fairly
  • an outline of the aims and objectives of the policy
  • an outline of any action or support groups that are being put in place to help, alongside any intentions to work with the menopause actions and third-party groups
  • a list of the type of support that you can offer, e.g time away from work where the symptoms are severe, encouraging communication, easy access to toilet facilities by repositioning the employee, providing alternative tasks to heavy lifting to combat increased levels of fatigue and muscle strain, etc.

Individuals respond differently to the menopause and it is essential that you are fully aware of this fact. Some women may be relatively unaffected whilst others experience significant difficulties for prolonged periods of time.

You should therefore ensure that all line managers and HR representatives are fully conversant with the policy on responding to the menopause and are able to respond to it in a non-discriminatory and open manner. Essentially, employees should feel comfortable and secure approaching this topic with their managers.

Salary & Salary Hours

My client wants to know if they can calculate reference salary and salary hours. What do they have to keep in mind when making these calculations?

Further guidance on the extended Job Retention Scheme (JRS) was recently released covering your client’s query.

My client should keep in mind that for employees to be eligible to have their wages claimed for under the extended JRS, they must be on an employer’s PAYE payroll by 23:59 30 October 2020. This means that your client must have made a Real Time Information submission notifying payment for their employees to HMRC between 20 March 2020 and 30 October 2020.

My client will need to calculate their employees’ reference salary in order to determine what 80% of it is. When employees are on flexible furlough, it will also be necessary to calculate what their usual hours are so you can record both working and furloughed hours.

For employees on fixed pay, employed on or after 20 March 2020, the last pay period prior to 30 October 2020 provides the basis for calculation. For employees on variable pay or hours, employed after 20 March, the average of tax year 2020 to 2021 up to the start of the furlough provides the basis for calculation.

For employees that meet the eligibility criteria, and were previously furloughed, my client must use the same calculations for calculating reference pay and usual hours as the original JRS.
For an employee who meets the criteria of the extended scheme, but was not previously eligible for JRS, alternative calculations of reference pay and usual hours must be used. Here, 80% of wages (subject to the £2,500 cap) must be calculated for employees, as follows:

  • on a fixed salary – 80% of the wages payable in the last pay period ending on or before 30 October 2020
  • whose pay varies – 80% of the average payable between the start date of their employment or 6 April 2020 (whichever is later) and the day before their JRS extension furlough periods begins

My client should be aware that these dates are inclusive.

If an employee was not previously eligible for JRS and works fixed hours or their pay does not vary according to the number of hours they work, their usual hours will be the contracted hours worked in the last pay period ending on or before 30 October 2020.

If an employee was not previously eligible for JRS and works variable hours, their usual hours will be the average hours worked between:

  • the start date of the 2020 to 2021 tax year, (for example, 6 April 2020)
  • the day before their JRS extension furlough periods begins

Again, these dates are inclusive.

It is essential that my client familiarise themselves with this as much as possible and regularly check it for updates, including updates on the scheme as a whole.

 

 

HR EXPERT: NMW ’EMERGENCY BREAK’

A client is concerned about how they will cope financially next year with the annual National Minimum Wage increases. Is it likely that the Government will introduce further measures to help businesses meet the rising costs? Or are there any other updates regarding this which can help the client?

It is unlikely that the Government will introduce measures to assist businesses in meeting rising cost or costs which are already in place with regards to the National Minimum Wage (NMW) and National Living Wage (NLW). However, a report by the Sunday Telegraph suggests that the Government may be considering scrapping the annual increase of the NMW and NLW next year – being referred to as an ‘emergency break’.

This is usually increased in April of every year with the year 2020 seeing the biggest increase thus far.

This news comes as the coronavirus’ impact on the financial stability of many businesses raises questions as to whether these businesses, such as my client’s, will be able to afford wage increases. It is likely, according to the newspaper, that Chancellor Rishi Sunak will be making the announcement in the upcoming Budget this Autumn.

In the fourth quarter of 2019, the Government pledged that it would increase the national wage to reach “60% of median earnings in the next four years.” However, the Low Pay Commission – an organisation which gives the Government advice on minimum wage uprating – has stated that the Government may have to withdraw from this plan in order to help businesses economically recover.

The Chair for the Low Pay Commission, Bryan Sanderson, has said that: “There are not many winners in today’s uncertain world. Our contribution to help steer a path through the complexity will be to provide a recommendation founded on rigorous research and competent analysis which has the support of academics and both sides of industry.”

On the other hand, the Trade Union Congress (TUC) has raised the point that an ‘emergency break’ would be the wrong move, especially for key workers who have not stopped working, even during the peak of the pandemic. Frances O’Grady, General Secretary of the TUC went further to say that rates should be increased to reflect the ‘real living wage’ – £10.75 per hour for those working in London, only being paid on a voluntary basis by approximately 6,000 organisations.

There is no doubt that my client’s business would be positively impacted if the Government were to implement this ‘emergency break’, as it will mean that compulsory pay rises will be less likely and organisations in financial difficulty will have less things to worry about and can focus on getting over the coronavirus hump. However, the TUC’s argument may be persuasive enough to dissuade the Government.

Despite this news, my client should keep in mind that, whilst many organisations have spoken on this issue since the news story broke on the morning of 7th September, the information has not come directly from the Government, or any of the Ministers within Parliament, so they need not rely on it. However, they can, and should, prepare for any possible outcome.

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