On 9 October 2020, the Chancellor of the Exchequer, Rishi Sunak, announced an extension of the Job Support Scheme. This extension is intended to safeguard the jobs of employees whose workplaces are forced to close because of local lockdown restrictions imposed by the government.
This scheme is comprised of a taxable grant claimed from Her Majesty’s Revenue and Customs (HMRC) a month in arears for up to two thirds of affected employee’s wages, capped at £ 2,100.00 per employee per month. It is intended to run for six months from 1 November 2020, with a review planned in January 2021.
To be eligible, the employee must have been on the employer’s payroll as of 23 September 2020, subject to a real time information submission to the HMRC.
The grant is available to all employers in an area and industry sector that is legally required to close because of local lockdown restrictions enforced by the government. It is not available for those businesses where a local outbreak has occurred forcing them to cease trading. For larger employers, it is expected that they will not be making capital distributions while in receipt of support from the scheme.
It should be noted that businesses that are restricted to take away or delivery services only, will also be eligible under the extended scheme.
Employees cannot be made redundant or served notice of redundancy while in receipt of support from the scheme.
Employees are eligible even if they have not previously been in receipt of support from the Coronavirus Job Retention Scheme, and eligible employers will remain eligible for the Job Retention Bonus, if applicable.
Employers will have to consult with their employees, as previously advised, in order to seek and secure their agreement to period of lay-off in order to access the grant, and ensure the relevant changes to their employment contracts are agreed and documented. If 20 or more employees are affected, then the requirement for collective consultation with employee representatives will be triggered.
The minimum period of lay-off for these purposes is seven consecutive, or calendar days. After which the Job Support Scheme grant remains available for periods where short-time working is required, subject to the rules of the wider scheme.
The HMRC intends to publish details of those employers and employees who have claimed against the scheme. Facilities will also be made available to report potentially fraudulent claims.
We have also created a Job Support Scheme Toolkit to help you through the process. Find out more here >>
This article is based on government guidance published on 9 October 2020. Further guidance may be published in due course, and we will update our advice accordingly.