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As an employer of a nanny, we know you will have a lot of questions during the COVID-19 outbreak. Similarly, nannies are worried about their jobs and especially how they will pay their bills.
We have created this update in response to the many questions we are receiving at myTamarin from nannies and parents, to help guide you through the current legal situation and the options that are available with regards to the employment status of your nanny while the coronavirus is storming around.
In this update we will cover sick pay, the new job retention scheme (or furloughing), short-time working, and redundancy.
Please note:
- Although many nanny salaries are still being agreed on a net basis, all the figures below reflect the gross numbers.
- The guidelines below only apply to nannies who are employed, i.e. their "employer" has a PAYE scheme and declares or pays taxes for the nanny.
This FAQ is not intended to be relied upon as legal advice but is intended to assist and is based on the information we have available to us, which is limited with grey areas. We will do our best to find out as much as we can and will keep you updated when we know more.
STATUTORY SICK PAY (SSP)
How does it normally work?
Nanny contracts typically don’t include paid sick days, though some parents may include them. In the absence of (fully) paid sick days, statutory sick pay applies if a nanny is off work sick for four or more days in a row (including non working days). This rule continues to apply for all illnesses not related to coronavirus (COVID-19).
To be eligible for SSP, an employee must earn an average of at least £118 per week.
Statutory sick pay is currently £94.25 per week, regardless of the number of hours or days an employee normally works. This is paid by the employer, up to 28 weeks.
How does it work with coronavirus?
As of 11 March 2020, the Government announced the introduction of emergency legislation temporarily amending the eligibility requirements for SSP, allowing the statutory payments to be made from the first day of absence due to coronavirus (COVID-19) either due to the actual sickness or the need to self-isolate.
As before, the statutory sick pay is paid at £94.25 per week, regardless of the number of hours or days an employee normally works, however the employee needs to earn at least £118 per week to be eligible.
The Government will refund sick pay for the first 14 days of sickness due to COVID-19.
What if a nanny is not sick but I ask them not to come into work?
If your nanny was told to self-isolate because, for example she has recently travelled to an affected country or been in contact with someone who has been confirmed as having the virus, she is entitled to SSP pay from day one, and you will be able to reclaim this amount from the Government for up to 14 days. You could offer your nanny the option to take the period as annual leave, but they would need to agree to this.
What happens if a nanny is fit and healthy, but a member of the family is ill?
If a nanny is otherwise fit to work, but you are insisting on a period of self-isolation, then the nanny should still receive their usual pay during that period.
You can ask them to take annual leave for some of the time (but they would need to agree to this), or alternatively use one of the other three options below.
What happens if a nanny is fit and healthy, but a family insists on self-isolating and asks them not to come to work?
In this case, the employer should pay the nanny full pay, or alternatively use one of the other three options below. Given that as of 29 March 2020 when this article was written, the Government still allows for travel to and from work when work can absolutely not be done from home, it appears that a nanny would not be entitled to any pay, and could potentially be let go. However, given the circumstances, we believe that the options below should be strongly considered first.
NEW JOB RETENTION SCHEME or otherwise known as FURLOUGHING
Furloughing is a new form of employment status that has been introduced as part of the COVID-19 Government Retention Scheme.
This scheme enables UK employers to access financial assistance from the Government to pay existing employees’ salary. The main objective of the scheme is to avoid employees being made redundant during this global emergency. Under the scheme HMRC will reimburse 80% of wages of workers who have been put on 'furlough leave' and would otherwise have been laid off during this crisis (up to a cap of £2,500 per month), plus employer pension contributions and NICs based on the 80% rate.
Am I eligible for the Government Retention Scheme?
The information we have to date suggests that all employers (who have a PAYE scheme) will be eligible for the Coronavirus Job Retention scheme so that should also apply to nanny employers.
How do I access the scheme?
The ability to furlough employees under the Coronavirus Job Retention Scheme will be operational from the end of April. The scheme is backdated and will apply from 1 March for at least three months until 31 May (unless extended).
To access the scheme, employers would need to take the following steps:
- Designate affected employees as ‘furloughed workers,’ and notify them of this change – they must be consulted and agree to being furloughed. Let us know (hello@mytamarin.com) if you need help writing the furlough agreement, we can help with a template;
- Submit information to HMRC about the employee that has been furloughed and their earnings through a new online portal (to be announced).
Please note:
- An employee must be consulted and agree to be furloughed;
- If an employee is furloughed, they generally are not permitted to perform any work duties during the furloughed period, however they can take part in volunteer work or training, as long as it does not provide services to, or generate revenue for their employer;
- Each furloughed worker must be furloughed for at least three weeks under Government rules. But, you can furlough employees for multiple periods, as long as they are at least three weeks at a time.
Does the scheme apply if I started employing my employee in March?
Employers can claim for employees who were on the payroll as of 28th February, but not after. In other words, furloughed employees must have been on your PAYE payroll on 28 February 2020.
What if I made an employee redundant after February 28th?
If you made an employee redundant after February 28th, you can re-hire and furlough them.
What if your employee is on SSP?
Employees on sick leave or self-isolating should get SSP, but can be furloughed after this. Also, employees who are shielding in line with public health guidance can be placed on furlough.
Does it apply to zero / variable hours employees?
Yes, zero / variable hours employees are included. Their furlough pay is 80% of wages averaged over the last 12 months or wages in March 2019, whichever is higher (up to £2.5k per month).
What happens when the Government ends the scheme?
When the Government ends the scheme, you must make a decision, depending on your circumstances, as to whether an employee can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).
SHORT-TIME WORKING
While there is no general obligation on an employer to provide work to an employee, where an employee is willing and able to perform work in accordance with the contract, the employer has an obligation to pay wages.
A potential temporary solution is to put the employee on short-time working if the contract permits. Or if the contract does not permit, seek to make an agreement with the employee.
Short-time working occurs when employees are laid off for a period of time, or for a number of contractual days each week, or for a number of hours during a working day. During such time an employee may be entitled to receive guaranteed pay of up to a maximum of £145 during any 3-month period.
As a general rule, short-time working is a temporary measure which can help avoid redundancy situations. However, if the lay-off lasts for a continuous period of up to 4 weeks, or for 6 or more weeks in a 13 week period, then the nanny can claim a redundancy payment.
A guide to short-time working can be found here.
REDUNDANCY
As an employer, you cannot make an employee redundant just because of COVID-19.
However, if the role is no longer available and there is no work for the employee to do, then their role can be made redundant, but they are still entitled to receive their notice and pay during that time. Plus, if they have worked for more than 2 years, they will legally be entitled to redundancy pay, which can be calculated here.
We understand that right now many families are self isolating and don’t want to bring any extra bodies into the house. However, once the situation improves we want to make it as easy as possible for you to find your perfect nanny. Here is our advice on Choosing the right nanny for your family and How to interpret nanny CVs and profiles.
If you have more legal and employment related questions, we are here to help. Please email us at hello@mytamarin.com.
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Parents sign up here to begin your nanny search.
Nannies sign up here to find your next family. Alternatively, you can send your CV to hello@mytamarin.com and we will be in touch!
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