Who can use the Coronavirus job retention scheme?
All businesses are eligible. However, the scheme is specifically stated to benefit employees “who would otherwise have been laid off”. The scheme describes recipients of this benefit as ‘furloughed workers’.
HMRC will reimburse 80% of furloughed workers’ wage costs, up to a cap of £2,500 per month.
In summary, organisation need to:
1. Identify and nominate ‘furloughed workers – i.e. workers who would otherwise have been asked to take some form of unpaid leave of absence;
2. Inform the employees of their change in status. This is subject to existing employment law and hence could be a matter of negotiation and agreement
3. Submit information to HMRC. To be confirmed through the gov.uk website.
What other support is available?
- Statutory sick pay relief package for SMEs (fewer than 250 employees and turnover below €50m)
- Deferred Valued Added Tax (VAT) payments for 3 months. Automatic offer with no action required.
- Business rates holiday for all retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000. Funding of £10,000 if the rateable value is under £15,000
- Small business grant funding of £10,000 for all businesses already in receipt of small business rate relief or rural rate relief
- The Coronavirus Business Interruption Loan Scheme to support cash-flow of long-term viable businesses
Can we defer bonus?
Whether a bonus can be deferred depends on what is written in the contract of employment. If the bonus is discretionary, then it can be deferred. If it is contractual, then the terms and conditions of the bonus plan will dictate whether the bonus can be deferred.
Communication is key and best practice would be to seek employees’ consent or communicate individually through leaders, particularly if there is an expectation of receiving a bonus.
Which areas of reward should be focus on in this environment?
Setting performance targets
With an uncertain environment and more performance variability, organisations should reconsider their goals and targets for the coming year and hence individual objectives.
For sales populations, setting realistic targets is critical to keep teams motivated. It is also important to be flexible and open to adjusting their targets later in the year.
- Keep in touch regularly and encourage face-to-face video conferencing
- Provide employees with key messages to communicate to clients and partners on a personal basis and keep them connected
- Run regular pulse surveys to gather employee feedback and understand their concerns
- Be transparent and open about any anticipated changes