In light of the Job Retention Scheme coming to an end on 31 October, the Government has created the Job Support Scheme, the aim of which is to try to assist businesses in protecting jobs that may be affected over the Winter period due to COVID-19. This Scheme can therefore be considered as an alternative to making redundancies until such time as things start to improve.
This new scheme is aimed at small and medium businesses who do have some work to offer their employees. The Government have accounted that the Scheme will run from 1 November 2020 until April 2021 and all employers with a UK bank account and UK PAYE schemes can claim the grant. However, companies do not need to have utilised the previous Job Retention Scheme in order to access the new Scheme.
An employee must be on their employer’s PAYE payroll on or before 23 September 2020 and/or the first three months of the scheme, the employee is required to work at least 33% of their usual hours. After 3 months, the Government will consider whether the minimum hours threshold should be increased. This is intended as a flexible scheme and therefore there is no requirement that employees should work the same pattern each month. The only requirement is that each short-time working arrangement must cover a minimum period of seven days.
As a simple example, if an employee works 2 out of their normal 5 days per week (40% of normal hours), the employer will need to pay them in full for these two days. The Employer and Government will then each need to pay a further one days’ pay each (i.e. 2/3 of the time not worked) to the employee. However this could be seen as a rather unattractive scheme to employers – as in this scenario employers would be liable to pay for 3 days work when only getting 2 days of work out of the employee.
For every hour not worked, both the Government and employer will pay a third each of the usual hourly wage for that employee and the Government contribution will be capped at £697.92 a month. Interestingly, companies who access the scheme are not able to make an employee redundant or put them on notice of redundancy during the period within which their employer is claiming the grant for that employee. It will be interesting to see whether this Scheme will actually fulfil its intention, that being to secure jobs both during and after the current pandemic.
The Government has produced some, albeit brief, guidance on this new scheme which can be found here.