The new Job Support Scheme, which will require employers to give staff a minimum of 33% of their usual hours, with the government covering some of the wages for the remaining hours not worked, will start on 1 November 2020…the day after the existing Coronavirus Job Retention Scheme comes to an end….
• Under the scheme, the government will subsidise the pay of employees who are working fewer than normal hours due to lower demand
• It will apply to staff who can work at least a third of their usual hours
• Employers will pay staff their usual rate for the hours they do work
• For the hours that employees cannot work, the government and the employer will each cover one third of the lost pay
• The government’s contribution will be capped at £697.92 per month
• All small and medium sized businesses will be eligible for the scheme
• Larger businesses will be eligible if their turnover has fallen during the crisis
• It will be open to employers across the UK even if they have not previously used the furlough scheme
• The scheme will run for six months starting on 1 November 2020
• The employee cannot be on notice of redundancy
• To qualify an employee must be on an employer’s payroll on or before 23 September 2020
In a nutshell:
Organisations will pay staff their full rate for the hours they do work – which must be at least 33% of their contracted hours to qualify for the support – with the government covering part of their wages for the hours there is no work for them.
So, for someone on £2,000 per month, if they work 50% of their hours they would receive £1,000 of normal pay from their employer, plus a further £333 from their employer and £333 from the government. The latter two payments make up the grant which has to be capped at £697.92 per month.
Do I use the scheme?
Employers have a decision to make now:
• Is the work there for staff to do, even on one-third hours?
• And is it economically viable to pay the employer’s share of the unworked hours on top?
Only when employers have done the sums will they know whether significant redundancies can be avoided.
Under this scheme, employers will be supported to offer staff shorter working hours in “viable jobs”, rather than make employees redundant.
There is no doubt that interaction with the £1000 Job Retention Bonus means that there is now a big incentive for organisations to retain workers part time to qualify for the bonus in January 2021. The end of January 2021 will become the all-important time to assess, once again, whether an organisation will have to start making any, or more, redundancies.
Employers must agree the new short-time working arrangements with employees and confirm them in writing. For any queries or assistance please get in touch: email@example.com or +44(0)7917 878384