With the much publicised ‘Furlough’ scheme drawing to an end on 31st October 2020, and the seemingly inevitable second spike of Coronavirus, there has been the understandable concern about what this will mean for employment within the UK, and this has been accompanied by the expected demand that the Coronavirus Job Retention Scheme (CJRS) should be extended.
On 24th September 2020, as expected, Rishi Sunak confirmed that the furlough scheme would not be extended, but instead replaced with the ‘Job Support Scheme’ (JSS). Mr Sunak also set out what further measures will be put in place to support businesses, jobs and ultimately, the economy.
In the never-ending battle to decipher fact, opinion and fake news, it is crucial to understand the key aspects of the Job Support Scheme;
- The Job Support Scheme, although not as generous to employer or employee as the Coronavirus Job Retention Scheme, is intended to run for 6 months, and will be come into effect on 1st November 2020, the day after the Job Retention Scheme (Furlough) concludes. The primary role of the new scheme is not to support all jobs, but to support “viable jobs”, and to specifically target those companies and sectors that need the most help such as hospitality and tourism.
- The scheme will be open to all employers, and not just those that have previously used the furlough scheme. To be eligible, employees must have been on the Company PAYE payroll prior to 23rd September 2020. It is also worth noting that Employers are still entitled to claim for the the Job Retention Bonus for employees who it keeps employed under the Job Support Scheme (provided minimum earnings thresholds are met), until January 2021.
- Employees will be eligible to receive a subsidy of the wages from the scheme if they are working at least one third of their normal hours, and are not in their notice period due to redundancy.
The JSS will work as follows:
- As long as the employee works a minimum of 33% of their normal hours, the employer will pay the employee their normal pay for the number of hours actually worked for the first 3 months of the scheme. After 3 months, the Government will consider whether the minimum hours threshold should be increased.
- Of the remaining hours not worked, the government will fund the pay for one-third of these hours (up to a maximum of £697.92 per month) the employer will also be required to pay one-third of these hours.
The outcome of this is that employees who work just one-third of their usual working hours would only see a reduction of around 22% of their usual pay.
Similar to the Coronavirus Job Retention Scheme, the JSS can be claimed by all SME’s. However, for larger businesses and organisations, the JSS can only be utilised if they can demonstrate that their business has been adversely affected by COVID-19. For example, we have seen some companies in recent weeks, such as Asos and B&Q, re-pay furlough money they received from the scheme as their profits actually increased during this period.
Claims will be made via Gov.uk from December 2020. They will be paid on a monthly basis and claims will be made in arrears, so with the scheme starting in November, it is expected that claims will not be able to be made until this point.
More details on the JSS are expected soon and we will provide a user-friendly guide to these when this happens.
The table below provides a useful illustration as to what this scheme means for both employers and employees:
|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%|
If you require any further information regarding this issue, please contact us on 01942 727200 or email at email@example.com and we will direct you to one of our consultants who will be able to provide additional details and guide you through the process.