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Paying staff during the COVID-19 pandemic

With staff numbers depleted and the ability to run services drastically reduced, juggling salary costs is a pressing challenge for many contractors

Unplanned learning

This article was correct at time of publishing (April 3). To keep up with the latest information please visit our coronavirus hub

The coronavirus pandemic is placing unprecedented demand on community pharmacies. As well as the increasing cost of medicines, many contractors have concerns about paying salaries and about extra locum costs.

Industry bodies including the Pharmaceutical Services Negotiating Committee (PSNC) and the National Pharmacy Association (NPA) have been asking the government and NHS England and NHS Improvement to implement urgent measures. These include an emergency cash injection into the sector and an advance payment scheme for NHS income, to keep pharmacies open. Measures implemented so far include £300 million in “advance funding” for community pharmacy in England – announced by the PSNC on March 31.(1)

In the meantime, if you are struggling to work out how to pay your staff, there are various things you can do.

Government assistance for employers

The chancellor has set out a package of temporary measures to support businesses through the disruption caused by COVID-19.

Under the Coronavirus Job Retention Scheme, all UK employers with PAYE staff will be able to access support to continue paying part of the salary for employees who would otherwise have been made redundant during this crisis. This applies to employees who have been asked to stop working but who are being kept on the payroll, otherwise known as “furloughed workers”. HM Revenue and Customs (HMRC) will reimburse 80% of their monthly wages, up to £2,500 per month. It is up to employers whether they pay the remaining 20% of wages. The scheme will cover the cost of wages backdated to March 1 and is initially open for three months. However, this will be extended if necessary.(2,3)

Financial support will also be provided to self-employed workers – including  locums – through the self-employment income support scheme. HMRC will contact self-employed workers if they’re eligible for the scheme (for which they will need to have an annual trading profit of less than £50,000). The scheme will give them a taxable grant of 80% of their trading profit, up to a maximum of £2,500 per month.(2)

Paying staff who are not working

If staff self-isolate because they feel unwell and they have been given a written notice, either by their GP or by NHS 111, they should be regarded as off sick and will be entitled to statutory or contractual sick pay for that time off. The current rate of statutory sick pay (SSP) is £94.25 per week for anyone earning over £118 per week (from April 6 this will change to over £120 a week). SSP will increase to £95.85 from April 6.(4,5). (4,5)

From March 13, SSP will be payable to anyone who is self-isolating from other people in such a manner as to prevent infection or contamination with coronavirus disease, in accordance with guidance published by Public Health England. The government has also announced that SSP will be payable from day one of absence rather than day four, as would normally be the case.(4,5)

As in normal circumstances, employees are entitled to time off work to help someone who depends on them (a “dependant”) in an unexpected event or emergency. The government says this also applies to situations related to coronavirus. For example, if you have children you need to look after or arrange childcare for because their school has closed, or if you need to help your child or another dependant who is sick or needs to go into isolation or hospital. However, there is no statutory right to pay for this time off.(6)

Other sources of finance

If your business needs short term cash flow support, you may be eligible for a coronavirus business interruption loan. This temporary scheme has been set up by the government to give SMEs based in the UK which turnover no more than £45 million per year access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years. Businesses can also apply for what the government calls a “business interruption payment”, which will cover the first 12 months of interest payments and fees levied by lenders. According to the government there are 40 accredited lenders able to offer the scheme, including all the major banks.(6,7)

If your businesses is in financial distress and you have outstanding tax liabilities, you may also be eligible for support with your tax affairs from HMRC’s time to pay service. If you have missed a tax payment or think you might miss your next payment because of COVID-19, you can access the scheme by calling HMRC’s dedicated helpline on 0800 0159 559.(6,7)

Whatever you decide to do, it’s good business practice to keep staff informed of your plans, as far as you are able to. Uncertainty among staff may lead to anxiety, resistance and demotivation – none of which are helpful in extraordinary times of such as these.

Further information
  1. Pharmaceutical Services Negotiating Committee (2020) COVID-19: Communications and a message from PSNC’s CEO.
  2. (2020) Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme.
  3. (2020) Check if your employer can use the Coronavirus Job Retention Scheme.
  4. Advisory, Conciliation and Arbitration Service (2020) Statutory Sick Pay (SSP).
  5. (2020) The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020.
  6. Advisory, Conciliation and Arbitration Service (2020) Coronavirus (COVID-19): advice for employers and employees.
  7. (2020) COVID-19: support for businesses.
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