In what will be welcome news for some employers, the Chancellor has this afternoon announced a new ‘Job Support Scheme’, which will commence in November. Employers will be supported to offer staff shorter working hours in “viable jobs”, rather than make employees redundant. The Chancellor has said that support must “adapt and evolve” and confirmed that the furlough scheme will end on 31st October.
What do we know about the Job Support Scheme so far?
Whilst we don’t have full details of the Scheme yet, it has been announced that:
- The Scheme will run for 6 months starting from 1st November
- All SME’s will be eligible – larger businesses will be eligible subject to certain requirements
- The Scheme will be open to employers even if they have not previously used the furlough scheme
- Employees must be on an employer’s PAYE payroll on or before 23rd September 2020 to be eligible. 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.
- In order to support viable jobs, 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 must be paid their normal contractual wage by the employer for the hours worked. For every hour not worked by the employee, both the government and employer will pay a third each of the usual hourly wage for that employee. The government contribution will be capped at £697.92 a month. This will ensure employees earn a minimum of 77% of their normal wages (where the government contribution has not been capped).
- Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but the reduced-time working arrangement 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.
- Grants will be payable in arrears, reimbursing the employer for the government’s contribution. This means 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. Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis. The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
The government has stated that if an employer wishes to utilise the Scheme, they will need to agree the new reduced-time working arrangements with employees, 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.
The government has said that further guidance on the Scheme will be published shortly and we will keep you updated on further developments. In the meantime, employers may wish to assess their anticipated staffing needs. Remember, it’s important to seek advice on the facts of your situation before taking action in relation to any employee.
If you have an employment law matter you would like assistance with, please do not hesitate to contact Kingfisher Professional Services Ltd.