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Will the new Job Support Scheme help you?

01 October 2020 Employment Law Jane McNicol

Many employers and employees have been dependent upon the Coronavirus Job Retention Scheme, commonly known as “the Furlough Scheme” since it began in April this year.

With the Furlough Scheme ending on 31st October and longer term Covid-19 restrictions being announced by both the UK and Scottish Governments, employers and employees are anxious to understand the new Job Support Scheme announced by the UK Government which begins on 1st November and will run for six months.

The Job Support Scheme is aimed at supporting employers who have employees whose roles they believe to be viable in the longer term, but who are facing lower demand due to COVID-19.

To qualify for the Scheme the following apply:-

  • an employee will need to work a minimum of 33% of their usual hours
  • the hours an employee works will be paid for by the employer
  • for every hour the employee does not work, the employer and the Government will each pay one third of the employee’s usual pay, and the Government contribution will be capped at £697.92 per month
  • an employee using the Scheme will receive at least 77% of their pay, subject to the cap on the Government contribution
  • the Government contribution will not cover Class 1 employer NIC or pension contributions - these will remain payable by employers
  • an employer will have to have a UK bank account and a UK PAYE scheme
  • an employee must have been on the employer's Real Time Information submission on or before 23 September 2020.

Unlike the Furlough Scheme, an employer cannot claim for contribution towards the wages of an employee who is on redundancy notice. Employers using the Job Support Scheme will be reimbursed in arrears for the Government contribution.

Employers considering whether to use the Scheme will have to carefully consider the affordability of retaining Employees versus the cost of making redundancies.

The Scheme may be most attractive to sectors such as the hospitality industry where staff are still needed to operate businesses, but demand is reduced due to the ongoing Covid-19 restrictions.

Employees who have been subject to the Furlough Scheme and who are hopeful that their jobs may be retained under the Job Support Scheme will still have to carefully consider any proposal made to them by their employer to bring their employment to an end. In some circumstances it might be more beneficial to the employee to agree to receive a payment to bring their employment to an end and to enter into a Settlement Agreement. An employer will usually contribute towards the cost of legal advice taken by the employee.

Whether you are an employer or an employee it is important that you take advice at an early stage if the ending of the Furlough Scheme is likely to affect your employees or your employment.

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