Budget 2020: employers to benefit from £12 billion plan to firefight coronavirus

Changes to statutory sick pay

The Chancellor acknowledged the temporary disruption to the UK economy that will result from the coronavirus and the possibility that up to 20% of the workforce may need to be off at any one time. He announced the following measures to provide security and support to those affected by coronavirus:

• Statutory Sick Pay (SSP) paid from day one rather than day four of sickness absence (as already announced), but with SSP also available from day one for those who are advised to self-isolate, even if they have not yet fallen sick.
• The government and the NHS will bring forward a temporary alternative to the fit note in the coming weeks which can be used for the duration of the coronavirus outbreak. This system will enable people who are advised to self-isolate to obtain a notification via NHS111, which they can use as evidence for absence from work, where necessary. This notification is designed to meet employers’ need for evidence, while taking pressure away from GP surgeries.
• The government will support small and medium-sized businesses and employers to cope with the extra costs of paying coronavirus-related SSP by refunding eligible SSP costs. The eligibility criteria for the scheme are as follows:
  • 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 commence 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.
• Appreciating the difficulties which could be faced by those who are self-employed or in the gig economy, for those who are ineligible for SSP, access to benefits will be made "quicker and easier". Those on contributory employment and support allowance will be able to claim from day one rather than day eight. Time spent off work due to sickness will be reflected in benefits with a temporary removal of the income floor on universal credit. A requirement to physically attend a job centre will be removed, with online and telephone services being used instead.

Supporting self-isolation

These measures support the Health Secretary Matt Hancock's previous statement that "self-isolation on medical advice is considered sickness for employment purposes. That is a very important message for employers and those who can go home and self-isolate as if they were sick, because it is for medical reasons". While a number of commentators have questioned whether or not our existing laws in fact allow payment of SSP in such circumstances, the Chancellor has clarified that SSP will be available from day one for those who are advised to self-isolate, but are not yet sick. The ACAS guidance on coronavirus goes further and encourages employers as good practice to pay contractual sick pay, where this is on offer, in cases of self-isolation. For individuals who are ineligible for SSP, the government has confirmed that there is a range of support in place including Universal Credit and contributory Employment and Support Allowance.

Delivering 'stability and security'

Reinforcing the need to support businesses through the current crisis if employment is to be protected in the longer term, the measures surrounding SSP are also complemented by other promises around changes to business rates and promises of loans to small and medium sized businesses. Full details are set out here.

The Chancellor delivered clear measures to provide an economic response to the coronavirus health crisis. He promised to deliver "stability and security" to the people of the UK. The situation is rapidly evolving and we are yet to see whether more drastic measures will be required to address the situation in the UK.

Please contact your usual Osborne Clarke contact for further advice on the latest position on paying your staff who are self-isolating and the options available to you.