Job Support Scheme: key points for employers
The Job Support Scheme will launch on 1 November. Coodes Solicitors employment specialist Philip Sayers outlines the key points for employers.
In his Winter Economy Statement on 24 September the Chancellor unveiled a new raft of support for businesses, including the Job Support Scheme.
The Coronavirus Job Retention Scheme (CJRS) has been a vital lifeline for employers with more than nine million employees on furlough at its peak. Although those numbers have since reduced somewhat as many employees have returned to work, millions remain on furlough or flexible furlough.
There has been growing concern that a raft of redundancies would follow the expiry of the scheme on 31 October. Therefore the Chancellor was under pressure to mitigate that risk. He was always clear that the CJRS could not continue in its present guise and announced a replacement scheme in his Winter Economy Statement.
The Job Support Scheme will commence on 01 November 2020, the day after the CJRS comes to an end. It will last for six months and is designed to support the wages of employees who are in viable jobs but are currently working shorter hours due to the effects of Covid-19.
What we now know about the Job Support Scheme
Here are the key points for employers:
- All small and medium sized businesses can take part whether or not they have previously furloughed employees. We are yet to hear the detail of which businesses are defined as being small or medium sized.
- Larger businesses can also take part but subject to a financial assessment test. It seems they will need to demonstrate that their turnover has fallen. The guidance also suggests that larger businesses will not be able to make dividend payments while participating in the scheme.
- The grant will not include employer National Insurance Contributions or pension contributions. These will remain payable by the employer.
- Employees will need to have been on the employer’s PAYE payroll on or before 23 September 2020 and the employer will need to have made a Real Time Information submission for the employee notifying HMRC that the employee has been paid.
- Employees cannot be made redundant (or given notice of redundancy) during a period for which the employer is claiming a Job Support Scheme grant for that employee.
- Employers participating in the scheme will also be able to claim a Coronavirus Job Retention bonus if they meet the eligibility criteria.
- Employees must work at least a third of their usual working hours and be paid by their employer for those hours. For the hours not worked, the employer and the Government will each pay a third with the employee accepting a reduction in pay to cover the final third.
- After the first three months the Government will consider whether to increase the minimum number of hours worked by the employee to above a third.
- The Government contribution will be capped at a maximum of £697.92 per month.
- Employers must have agreed the new working pattern with their employees and a copy of that agreement must be made available to HMRC on request.
- The Government will shortly produce guidance on how to calculate usual wages for the purposes of making a claim. This will be based on full pay rather than any furloughed rate of pay.
- Employers will be able to take employees on and off the scheme. However, each short-time working arrangement must last at least seven days.
- Employers will be able to make a claim online from December 2020.
For more information or advice, please contact the Employment team at Coodes Solicitors: 0800 328 3282 or email@example.com