There are certain questions that need to be asked around the area of payment:
- Continue to pay the employee as normal or put the employee on short term lay off (contract permitting)?
- Allow the employee to work from home – where possible? ISME Members Radius technologies have the following advice on remote working here
- Provide them with the option of taking a day’s annual leave to cover their absence?
- Allow the employee to make up any missed time at a later date?
The government has announced a National COVID-19 Income Support Scheme. This will provide financial support to Irish workers and companies affected by the crisis.
- a temporary wage subsidy of 70% of take-home pay up to a maximum weekly tax-free amount of €410 per week to help affected companies keep paying their employees. This is the equivalent of €500 per week before tax. More information about the scheme can be found here.
- workers who have lost their jobs due to the crisis will receive an enhanced emergency COVID-19 Pandemic Unemployment Payment of €350 per week (an increase from €203)
- the COVID-19 illness payment will also be increased to €350 per week
- the self-employed will be eligible for the COVID-19 Pandemic Unemployment Payment of €350 directly from the Department of Employment Affairs and Social Protection (rather than the Revenue scheme)
- enhanced protections for people facing difficulties with their mortgages, rent or utility bills
Read in full HERE
WAGE SUBSIDY SCHEME – Notes from the ISME Team
- While we have some concerns about the criteria surrounding the scheme, for many businesses, this will be the only way to retain employees on their payroll through what will be a period with a severe decline in trading. The Government is asking businesses to take Revenue at their word in how they intend to operate the scheme. Each business will need to take evaluate this line of communication. Revenue’s high-level policy guidance is available here.
- This is a complex scheme, especially where employee pay is variable, so please ensure you or your payroll provider understand the guidelines before applying for the subsidy. Revenue’s latest detailed guidance, which is subject to update, is available here.
- Firstly, you must understand if your business needs to avail of the scheme. The index period for it is from 14th March to 30 June 2020, and the test is whether a 25% reduction in turnover will take place. While some businesses may not be affected, or are regarded as essential services, it is expected that most businesses can expect a significant decline in turnover in the next number of weeks.
- It is also important to understand that this scheme is solely for the benefit of employees. It is not a source of working capital for a business. If your business avails of the scheme, you must pay 100% of the benefit to your employees.
- The scheme creates three ‘bands’ of employees:
- Those who normally earn up to €586 (net) per week; they can be paid up to €410 per week in wage subsidy,
- Those who normally earn between €586 and €960 (net) per week; they can be paid €350 per week in wage subsidy, and
- Those who normally earn more that €960 (net) per week; they do not qualify for wage subsidy
- The government has stated that the intent of the scheme is for employers to top-up this payment, where they can, to normal levels of net pay for each employee. Each business should examine the degree to which this is feasible for them. Where businesses have significant cash reserves, there is an expectation that this top-up will be made.
- Companies should be careful that they do not pay employees more than they would normally be paid, as this will produce additional tax liabilities for companies when the Revenue eventually conducts reconciliation and evaluation activity.
- Please remember that the name of your company will be published if you avail of this scheme. The government has been clear that there will be no exceptions to this. The government has stated that this should not be interpreted as meaning a company has done something wrong, or that a company is effectively trading recklessly. The government has asked that companies do not view the publication of participation in this scheme as a disincentive to use the scheme. Ultimately, each business will need to take a view of the facts as they exist today and evaluate their participation on the basis of the facts.
- While the Revenue ‘does not consider that any employer will require professional advice or assistance in being able to prove to the satisfaction of Revenue that these criteria are met,’ this refers only to the qualifying criteria. ISME strongly advises you to avail of professional advice before using this scheme, if only to ensure you do not inadvertently misuse the scheme, over-pay employees, or incur an avoidable future tax liability.
In the unfortunate cases where staff will need to be let go, ISME HR has a number of resources for you in the Members Area such as templates for:
- Redundancy Letter – At Risk
- Template Letter for Redundancy and payment
- Lay Off Notification
- Short Time Notification
- Collective Redundancy
- Protective Notice
You can access these here
You can also email or call our HR Support service Monday – Thursday 9.00 -5.30 and Friday 9.00 -5.00