Coronavirus: what employers need to know about pay

9 Mar 2020 By Sarah Ozanne and Natassia Smith

As Covid-19 continues to spread, companies will be affected by absence from both infection and self-isolation. Sarah Ozanne and Natassia Smith explain when employees are entitled to payment

Recent reporting shows that one-fifth of the workforce may be off sick at some point. It is likely that requests for employees to self-isolate will become increasingly common. 

Companies are already establishing policies to address virus risks and absences. For example, JD Wetherspoon has published a coronavirus Q&A sheet outlining leave entitlements, and Chevron sent all employees in its London office to work from home when an employee who had visited Italy began to feel unwell. Acas and the government have published guidance for employers and employees on how to deal with Covid-19 in an employment context.

All companies need to consider and prepare for employee absences as a result of coronavirus:

Are employees entitled to payment if they are unable to work because of sickness caused by Covid-19?

Yes, if an employee is away from work sick the usual statutory regime or company contractual entitlements relating to sick pay are applicable. Currently, employees are only entitled to statutory sick pay (SSP) once they have been absent from work for four days. However, on 4 March, the prime minister announced plans to require the payment of SSP from the first day of an employee’s illness absence. It is unclear when this change will become effective. 

To receive SSP, it is usual that a doctor’s note will be necessary after seven days’ absence. However, to encourage strict quarantine arrangements, health secretary Matt Hancock told the House of Commons that the government may need to review the requirements of doctors’ certificates. Companies have discretion to make exceptions to the usual evidence requirements and it is likely that further clarification will emerge from the government on this requirement. 

Are employees entitled to payment if they are required to self-isolate or quarantine because of Covid-19? 

If an employee receives a written notice to self-isolate from a GP or NHS 111, they will be entitled to SSP and all the points above relating to payment of employees on sick leave are applicable. 

There may be those who choose to self-isolate. This is likely to become a more significant issue if Covid-19 continues to spread. In the absence of a written notice from their GP or NHS 111 there is no obligation on the employer to pay SSP. This is because the employee is not considered ‘incapable of working’. 

If an employee is required to self-isolate, companies should consider whether employees are able to work from home and encourage them to do so. This allows the employee to abide by self-isolation advice but continue to be paid. Companies should be aware that if they do not allow employees who are able to work from home to do so, and refuse to provide payment, the employee could claim a breach of the implied duty of trust and confidence or an unlawful deduction of wages. 

Withholding pay from all those in self-isolation who are unable to work is unlikely to be well-received. From a practical perspective, a policy of requiring employees to isolate but not receiving pay may result in employees attending work while unknowingly ill to continue to get paid. As a result, we recommend that companies make it clear that any attendance at work against company guidelines will be treated as a disciplinary matter.

If employers want to place limitations on the payment of company sick pay where employees have travelled to high-risk areas against government guidance, they can consider introducing a policy that specifies that the company may withhold sick pay if an employee has travelled to such an area in such circumstances.

Are there any entitlements for workers on zero-hours contracts or those who are self-employed if they are affected by Covid-19? 

Generally, workers on zero-hours contracts and those who are self-employed have no entitlement to receive company sick pay or SSP. However, a Downing Street source has reported that the government is considering appropriate entitlements for zero-hours contract workers and those who are self-employed to ensure they self-isolate. If the virus continues to spread, developments in this area are expected – particularly as the Labour Party and the unions continue to put pressure on the government to promise SSP to all workers regardless of status. 

Is Covid-19 likely to lead to further changes in the law?  

This issue, and the legal ramifications of it, are still a moving feast. However, the most important thing for employers to emphasise to their employees is that while the government continues to develop its response to Covid-19, Public Health England advises that the best form of prevention is good hygiene. Companies should ensure, where possible, they have facilities available for use by all employees to support this, including soap and hand sanitiser. 

The government publishes daily updates with the latest statistics and advice. It is important to continue to monitor this, as it is expected that the guidance will change substantially over the coming weeks.

Sarah Ozanne is an employment lawyer and Natassia Smith an associate at CMS

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