Job Support Scheme – What Do the Changes Mean for Your Business?

On 24 September 2020, the Government announced the next steps for supporting workers and businesses as the Coronavirus pandemic continues.

The job support scheme will open on 1 November 2020 and run for 6 months, until April 2021 and is designed to support jobs which will be sustainable once the pandemic has receded.

You will continue to pay your employee for the time they actually work, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction).

The important factor being that jobs sustainable in the longer term are able to be preserved despite a downturn in activity over the winter. Employers will also be able to claim the Job Retention Bonus of £1k for each those workers still on the payroll at the end of January if they meet the eligibility criteria.

Further guidance will be published shortly so, for the moment, the key points you need to note are:

All small and medium-sized businesses will be eligible for the scheme. Large businesses will have to meet a financial assessment test, the scheme is only available where turnover is lower now than before Covid-19 started to impact UK businesses.

If you are a UK business you can apply, even if you have not previously used the furlough scheme at all, or if the employees you are now claiming for were not furloughed as part of the job retention scheme.

Your employees must work at least a third (33%) of their normal hours

for the first three months of the scheme. After 3 months, the Government will consider whether to increase the minimum hours required. Note:

    • You must pay staff for the hours they work at their normal contractual rate of pay.
    • For time not worked, the employee will be paid up to two-thirds of their usual pay.

This means an employee working a third of their usual hours would receive 77% of their pay where the Government contribution has not been capped i.e. the government will pay a maximum of 22% of someone’s normal monthly salary. The government’s grant contribution will be capped at £697.92 per month.

Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real-Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.

The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.

Employers must agree the new “short-time” working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.

Employers can rotate employees on and off the scheme and employees do not have to work the same hours each week, but each “short time” period claimed must cover a minimum period of seven days.

Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

We await further news on how you can claim, according to the updates on the Government website you will be able to claim through their website from December 2020 and payments will be made monthly (https://www.gov.uk/government/publications/job-support-scheme

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