New: Job Support Scheme

Yesterday afternoon (24 September 2020), Chancellor Rishi Sunak set out details of a new government scheme to aid businesses after the end of the furlough scheme: the Job Support Scheme. The general structure of the scheme has been provided but the detail will be forthcoming in the next week or so.

Under the Job Support Scheme, the government aims to protect “viable jobs” by partially funding salaries alongside employers. Essentially, employees must work at least a third of their hours and the salary relating to the hours not worked will be born equally:

(1) 1/3 will be paid by the government (up to a cap);

(2) 1/3 will be paid by the employer (as well as pay for the hours worked); and

(3) 1/3 will be foregone by the employee.

This means that at the 33% minimum hours level, employees will receive 77% salary in return. 22% of that 77% will be funded by the government with 55% coming from the employer.

If the employee works 55% of their normal hours then the government (subject to a cap) would contribute 15% (a third of the 45%) of their salary and the employer would cover 70% so the employee receives a total of 85% salary and so on.

As a reminder, the Coronavirus Job Retention Scheme (CJRS) comes to an end on 31 October 2020 after a gradual phasing out since 1 August 2020.

The Job Support Scheme will run for six months from 1 November 2020 (i.e. back to back with the end of the CJRS/furlough scheme).

All small and medium sized businesses will be eligible as will large businesses whose turnover has been negatively effected by the Coronavirus crisis. Business do not need to have utilised the CJRS/furlough scheme to be able to benefit from the Job Support Scheme.

The Chancellor said that the self-employed will have parity as the government will be extending the self-employed grant on similar terms.

Some further key details to note:

• 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. The agreement must be made available to HMRC on request.

• Employers will not be able to make employees redundant or put them on notice whilst benefitting from the Job Support Scheme.

• The Government contribution will be capped at £697.92 a month.

• Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

• The government’s expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the Job Support Scheme.

• Employees must be on an employer’s PAYE payroll on or before 23 September 2020.

• For the first three months of the scheme the employee must work at least 33% of their usual hours. After 3 months, the government will consider whether to increase this minimum hours threshold.

• Employees will be able to ‘cycle on and off the scheme’ and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.

• Grant payments will be made in arrears, reimbursing the employer for the government’s contribution. The grant will not cover Class 1 employer NICs or pension contributions; these contributions will remain payable by the employer.

• Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis.

If you would like our assistance to put arrangements in place to make use of the Job Support Scheme then please contact us on 020 3178 5360 or info@kervinandbarnes.com or feel free to contact one of our employment lawyers directly.