As you will be aware, in response to the Covid-19 pandemic that has swept the UK, and the world, and the devastating impact it was (and still is) having on businesses, in March 2020 the Government introduced the concept of Furlough Leave, providing grants for paying employee wages through the Coronavirus Job Retention Scheme (“CJRS”) to support businesses through this time of crisis.
Many businesses were fearful that the end of the CJRS on 31 October 2020 meant the end of this support, however, yesterday, (24 September 2020) the Chancellor unveiled his plans for a new scheme to replace the CJRS – the “Job Support Scheme” (JSS).
Key Points
- It will apply to “viable jobs” only – the aim is to support jobs that are “viable” to avoid redundancies, applying to situations where businesses still need their employees to do some work, but less than their normal hours, due to the ongoing impact of the pandemic.
- Not all businesses will be eligible – larger businesses (we believe those with over 250 employees, although this is yet to be confirmed) will only be entitled to use the JSS if they can prove that their revenue has been adversely affected by Covid-19.
- Even if employers have not accessed the CJRS, they will be entitled to use the JSS.
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming support under the JSS.
- The JSS shall come into effect on 1 November 2020 and last for a minimum of 6 months.
- The JSS appears to apply to any employee – (although we are still awaiting further detail in this regard) as long as they were on the PAYE payroll on or before 23 September 2020 and the employer had made an RTI submission to HMRC notifying the need for payment to that employee on or before 23 September 2020.
The Detail
Eligible employees will have to carry out at least 33% of their normal hours (and be paid by the employer in the normal way for these hours). The Government have indicated that this 33% threshold will be reviewed after the first 3 months, and may be increased.
Of the remaining time that the employee does not work, the employer will pay a third towards their pay, and the Government, by way of a grant operating in a similar way to the CJRS, will pay a further third, up to a maximum of £697.92 per month.
By way of example: if someone on £2,000 a month works 50% of their hours, they’d get £1,000 normal pay from their employer (50% of £1,000) plus £333 extra from their employer and £333 from the Government (so both the employer and the Government paying 33.3% each of the hours that the employee is not working). This means that the employee would sacrifice £333.
How?
Given that putting employees on the JSS will result in a reduction in their salary and hours, then employers must agree this with their employees, and confirm this agreement in writing.
Payments will be made to employers in arrears. As such, businesses will be required to pay the Government’s contribution before being reimbursed. As with the CJRS, employers will be able to claim these payments back by making a claim online from December 2020.
There are still questions that remain and as ever, the devil will be in the detail, however, the Employmentor Team are on hand to answer any questions you may have.
Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any particular circumstance. If you would like more information on the content of this article, please call the Employmentor Team on 01603 281139.
