Written by Lucy Churchill, Senior Associate at Spire Solicitors LLP.
On 24th September 2020, Chancellor Rishi Sunak, announced a new plan to help save jobs in the face of a second wave of Covid-19. The new scheme, known as the Job Support Scheme, will replace the current Coronavirus Job Retention Scheme when it ends on the 31st October 2020.
The scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months, to help keep their employees attached to the workforce. The scheme will open on 1st November 2020 and run for 6 months.
Employees must work at least one-third of their normal hours, and the company will continue to pay its employee for time worked. For every hour not worked, the employer and government will each pay 1/3 of the employee’s usual pay. This will ensure the employee earns a minimum of 77% of their normal wages, and the employee will keep their job.
The level of the grant will be calculated at the employee’s usual salary, but the government contribution will be capped at £697.92 per month.
The table below sets out how the Job Support Scheme will work:
|Hours Employee Worked||33%||40%||50%||60%||70%|
|Hours Employee Not Working||67%||60%||50%||40%||30%|
|Employee Earnings (% of normal)||78%||80%||83%||87%||90%|
|Gov’t Grant (% of normal wages)||22%||20%||17%||13%||10%|
|Employer Cost (% of normal wages)||55%||60%||67%||73%||80%|
Who is eligible?
- The scheme is designed for small- medium sized businesses. If a large business can prove their turnover is lower now than before Covid-19, they may also be eligible.
- Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.
- Employees do not have to be working the same pattern each month and can switch on and off the scheme.
What other employment help is available?
To minimise unemployment, the government is also giving firms:
- £1,000 for every furloughed employee kept on until at least the end of January.
- £1,500 for every out-of-work 16-24-year-old given a “high quality” six month work placement.
- £2,000 for every under-25 apprentice taken on until the end of January or £1,500 for over 25’s.
This is a brief overview of the government support available to businesses. If you need any further guidance or HR and employment advice, please contact Lucy Churchill on 01603 677077 or email@example.com.