COVID-19 E-shot 24/03/20

***The information given on these pages is the legal stance based on the government advice, please be mindful that this advice can change. This is the absolute minimum required by law. It is the Employer's decision whether they need their employee to work and what they pay to their nanny, you are allowed to pay above the minimum if you wish to. Making decisions about whether to pay more than the minimum can be a very difficult one, you will need to consider many things, such as, your future relationship with your employee and the affordability for you and your employee in these troubling times. It is wonderful to see that many employers have been able to retain their employees on full pay during this pandemic, but we appreciate that some will not be able to. Please be assured that this is your decision to make.***

Copy of email sent to clients on 27/03/20.

May I start by thanking you in advance for your patience with the NannyPaye team over the coming weeks.  As you can imagine we are running a service for many thousands of UK employers most requiring increased support whilst our team here is drastically depleted and disrupted.

My e-mail today is to highlight an update last night (26th March 2020) from Gov.UK regarding the Coronavirus Job Retention Scheme.  I have linked to the update below but will highlight the points I feel most pertinent in this e-mail.

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme  

Have the Government confirmed if an employer of a Nanny is eligible to claim?

Sadly in our view we still do not have a firm confirmation of your eligibility to the scheme.  Whilst we feel the spirit of the Coronavirus Job Retention Scheme should make you eligible this has yet to be confirmed.

HMRC have updated their wording slightly to reflect all UK employers with a PAYE scheme will be able to access support as below:

“Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.”

However, they have still kept the eligibility criteria as ‘all UK Businesses’.  We have commented in our previous updates that the employer of a Nanny is not normally recognised as a business.

This has been further reinforced with a list of organisations with employees that can apply. This is not an exhaustive list but does not specifically mention employers of domestic workers which we would have hoped to see.

  • businesses
  • charities
  • recruitment agencies (agency workers paid through PAYE)
  • public authorities

NannyPaye will keep updating you as the guidance becomes more specific.

When did my Nanny have to had started?

This is a key update and will affect many of our clients based on the calls we have been receiving.  Gov.uk states:

“The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020.”

“Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract”

“Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.”

We interpret this as immediately excluding any employer whose employee(s) started from 29th February onwards.  We have received many calls from clients asking if they can Furlough their employees from their start date.  If that start date is 29th February or later the conclusion is no and they should seek advice from NannyPaye on the appropriate next steps.

How much can you claim for?

It has now been confirmed that you will now be able to claim for 80% of the gross salary (up to £2500) PLUS your Employer NIC costs and Employer Pension cost on that 80%.

What if my Nanny’s pay varies. How much should I pay through furlough?

Gov.uk states:

“If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:

  • the same month’s earning from the previous year
  • average monthly earnings from the 2019-20 tax year

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.”

How much should I pay my employee under furlough?

You cannot reduce your employees wage below the lower of 80% of their salary of £2500 per month.  You can pay a full salary but you will incur the cost of the difference between your claim amount and the full salary cost.

How long can I furlough my Nanny for?

There is a minimum period of three weeks to be able to make a claim for costs and the scheme is currently due to end on 31st May 2020. When the scheme ends the employer will need to make a decision dependent on your circumstance as to whether your Nanny can return to duties or if it may be necessary to consider termination of employment (redundancy). As always please seek specific advice around this matter from our legal team.

What if I made my Nanny redundant since 29th February 2020 and would have otherwise furloughed if I had been aware of the scheme?

In this situation you can re-employ people and then furlough them.  Please seek guidance from our legal team before taking any action in this area.