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12 Mar 2020

Budget 2020 – Key points for employers


Yesterday’s Budget understandably focussed on the impact of coronavirus on the UK economy. We are regularly advising clients on the many different HR/employment law issues that arise in connection with the coronavirus/COVID-19 pandemic. Please do get in touch with one of our team if you require advice. 

Amongst the more high profile news in the Budget of changes to statutory sick pay rules were some other important employment related plans and proposals. We’ve summarised the key points for employers to note:

1. Statutory sick pay (“SSP”) eligibility –

  • The Government confirmed that SSP will be available from day 1 of sickness rather than day 4 for COVID-19 related illnesses. This will take effect when the proposed COVID-19 Bill comes into force (it is due to be laid before Parliament next week).
  • SSP will also be available on the same terms for employees who self-isolate on medical advice but who do not have any symptoms of COVID-19 (the timing of the revised SSP regulations is still tbc). 
  • Employers should not require employees to provide a GP fit note for COVID-19 related absences. Instead a new NHS111 notification will soon be introduced which can be used as an alternative to the normal GP ‘fit note’ during the COVID-19 outbreak. 
  • Employers should still maintain records of staff sickness absences, and note whether it is a COVID-19 related sickness or not.

2. SSP reimbursement – The Government will refund employers with fewer than 250 employees up to 14 days of SSP per employee, if that SSP was claimed as a result of COVID-19. This will apply from the day the relevant SSP regulations extending SSP to self-isolators come into force (the timing is still tbc).

3. National Insurance changes -  (A) The National Insurance contributions (“NICs”) primary threshold and lower profits limit has increased from £8,632 to £9,500 from April 2020. (B) Employers who employ a veteran in their first year of civilian employment will from April 2021 be able to claim a NICs holiday: they will be exempt from NICs up to the Upper Earnings Limit during that first year of civilian employment.

4. National Living Wage – This will increase by 6.2% from April 2020.

5. Neonatal Leave and Pay – A new entitlement to Neonatal Leave and Pay will be created, benefitting employees whose babies spend more than a week in neonatal care straight after birth. Eligible employees will be entitled to take an extra week of paid leave for each week their baby spends in neonatal care, up to a maximum of 12 weeks. The full details of the scheme are yet to be announced but it’s likely that the eligibility criteria will match normal statutory maternity and paternity pay criteria and that the rate of pay will match the base statutory maternity pay rate. Employees will be able to add this neonatal leave onto the end of their maternity/paternity/adoption leave, meaning that fathers and partners with babies in neonatal care will be entitled to far longer leave periods after the birth in addition to the usual two week paternity leave. Further consultation will take place on the specific regulations but the Government expects to introduce this leave in the 2023/2024 tax year. We’ll provide updates when the new entitlement is clarified.

6. Carers’ leave – The Government will consult on the design of a new in-work leave entitlement for employees with unpaid caring responsibilities (e.g. for dependents or family members). Little details are provided about this proposed leave at this stage.