On Thursday 24 September 2020, Chancellor of the Exchequer, Rishi Sunak, announced plans to provide further support to employers and employees following the closure of the Coronavirus Job Retention Scheme from 31 October 2020. But what is the Job Support Scheme? Here is what you need to know.
What is the new scheme?
From 1 November 2020, employers will be able to claim support from the Job Support Scheme for anyone they bring back to work on short time working for at least 1/3 of their normal working week.
They will be paid their normal wage for any hours they work, and for any hours they do not work, the government will subsidise 1/3 of the unworked hours (capped at £697.92 per month), provided the employer subsidises the same. Therefore, the employee may receive up to 77% of the normal wage while only working 33% of their normal hours.
For the first six months, eligible employees must work at least 33% of their normal working hours for employers to claim the grant. However, they can work more. The government will review minimum working hours required in three months’ time.
Employers cannot ‘top-up’ employee wages for those in receipt of grant support.
Employers can cycle those employees on short time working arrangements, but each period must be no less than seven calendar days to claim the grant support.
Also, the grant is claimed a month in arrears, so employers will have to pay the employee and then claim the grant funding back following their RTI submission for the previous month.
Who is eligible?
All small and medium enterprise businesses will be eligible without financial assessment. Large businesses who have suffered a reduction in turnover as a result of Covid-19 will be eligible subject to financial assessment. It is anticipated that any large business approved for support will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant.
Employees must have been on the payroll, subject to a real time information (RTI) submission to the HMRC, as of 23 September 2020 to be eligible for support. They do not have to have been previously designated furloughed workers.
How do I enact this ‘short-time working’?
If you have the contractual right in your contract of employment you can enforce a period of short time working. This must be confirmed in writing and records must be kept for HMRC inspections.
If you do not, then you will have to consult and secure agreement from your employees in writing to the change to short time working. Once again, records must be retained for HMRC inspections.
Please note: if you are looking to change the terms and conditions of 20 or more employees in any 90 day period, you will have to collectively consult with employee representatives prior to implementing the change, even if you have the contractual right to do so.
The biggest change
Employees cannot be put on notice of redundancy or made redundant at any point when they are in receipt of the government’s Job Support Scheme.
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 24 September 2020. Further guidance may be published in due course, and we will update our advice accordingly.