- Furlough will end as planned. The focus is now to switch to supporting people in work, rather than keeping people out of work. It is hoped that this will nurture economic recovery.
- The buzzword is “viable” jobs. The Government has made clear that it cannot look after jobs that are not viable. It is likely that we will see a number of those who have been furloughed, whose roles have been made absent due to the impacts of the virus face no choice but to be made redundant by their employer when Furlough ends.
- The Government will support the wages of employees who are in work. As an alternative to redundancy, employers can keep employees in viable jobs in work at reduced hours.
- Employees must be in work for at least 1/3 of their normal hours, and be paid for those hours by their employer. The Government and the employer will then support the remaining 2/3s of time not worked. Of the remaining 2/3s time not worked, the employer and government will each contribute 1/3 of that value (1/9 of the employee’s total salary), and 1/3 will remain unpaid. Therefore, under the scheme, an employee will work 33% of their normal contracted time, and their employer will pay 55% of an employee’s normal full time wage, whilst the Government will contribute 22% of the employee’s full time wage. So, the employee will be paid 77% of their salary. The Government’s contribution will be gross, so the employer will have to pay the NI and pension portion of the government’s contribution to the salary.
- There is a cap on the level of Government support of £697.92 per month.
- The minimum working time of 1/3 of normal hours may increase during the final months of the scheme.
- It’s also worth noting that this scheme is designed to sit alongside the jobs retention bonus announced earlier in the year. This is a one-off Government payment to employers of £1,000 for each former furloughed employee who they claimed for under the furlough scheme, who remains continuously employed from 1 October 2020 through to 31 January 2021. Employees must earn at least £520 per month for this to apply.
- Small and medium sized businesses are automatically eligible for the Job Support Scheme. Large businesses are only eligible if they can show that their turnover has been negatively affected by the virus.
- The scheme is open to employers who previously used furlough and to employers who have not previously furloughed their employees.
- Unlike the furlough scheme, employees working any redundancy notice period are not eligible for support under the new scheme.
- The scheme will last for 6 months starting in November, and running through until the end of April 2021.
- Only employees on employer’s real time payroll submission on or before at 23 September 2020 are eligible under the new scheme.
- Self-employed grants extended on similar terms and conditions as the scheme.
You can access the full Government guidance here.
We will shortly publish a full article on what the new scheme means, how it will affect industries, and other protection measures implemented by the Government. If you have any immediate questions, please do not hesitate to contact us.