Please note, since this article was first published the Government has announced a further extension to the Coronavirus Job Retention Scheme to 31 March 2021, meaning that the Job Support Scheme will no longer take effect from 1 November as originally proposed. Please see our latest article.
On 24 September 2020, Chancellor Rishi Sunak announced that the Government would be introducing a new Job Support Scheme to take effect from 1 November 2020, after the Coronavirus Job Retention Scheme (CJRS) closes on 31 October 2020.
It is proposed that the new Scheme will run until the end of April 2021. Detailed guidance will be published in due course but the main points to note are as follows:
- the scheme is open to employers that have not previously used the CJRS, but large employers will have to meet a financial assessment test to show the negative impact of COVID-19 on their turnover. Small and medium enterprises will not be required to meet this test
- employees must be on an employer’s PAYE payroll on or before 23 September 2020 to be eligible under the Scheme
- for the first three months of the scheme, an employee must work a minimum of 33% of their usual hours. The employer will pay wages at the normal contractual rate for any hours worked. This threshold may be increased after three months, from February 2021
- as with the CJRS, employees can be rotated on and off the scheme. Each short-time working arrangement must be for a period of at least seven days
- for every hour not worked by the employee, the Government and the employer will each pay a third of the employee’s ‘usual wage’ (calculated in the same way as under the CJRS). The Government contribution is capped at £697.92 per month. The remaining third will be unpaid
- unlike under the CJRS, employees cannot be made redundant or be put on notice of redundancy during the period in which the employer is claiming the grant for the employee
- claims will be paid to employers on a monthly basis, in arrears, with the first claims being paid in December 2020
- employers must agree the new short-time working arrangements with their staff and notify the employee in writing of any contractual changes agreed with them.
In the Government’s factsheet, published on 24 September 2020, they provide the following figures to show how the breakdown will work in practice:
|Hours Employee Worked||33%||40%||50%||60%||70%|
|Hours Employee Not Working||67%||60%||50%||40%||30%|
|Employee Earnings (% of normal)||78%||80%||83%||87%||90%|
|Gov’t Grant (% of normal wages)||22%||20%||17%||13%||10%|
|Employer Cost (% normal wages)||55%||60%||67%||73%||80%|
Unlike the CJRS, the Job Support Scheme is designed to protect viable jobs in businesses with lower demand over the winter months. Any employers making use of the Scheme will also be able to claim the Job Retention Bonus of £1,000 in respect of any furloughed employee who is still employed by 31 January 2021.
These articles are from the September 2020 issue of Employment and Immigration Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website. For further information please contact Liz Stevens or another member of Birketts’ Employment Law Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at September 2020.