As you should hopefully be aware, the current government furlough scheme will end completely on the 31 October 2020 to be replaced by the new “Job Support Scheme” (JSS).
For employers this represents a big drop in the funding available to keep employees on the payroll. It appears that this Job Support Scheme (JSS) will now only be useful if you want to keep people employed to retain skills – you will still end up being slightly out of pocket for time the employee is kept furloughed. This seems to be consistent with statements made by the Chancellor Rishi Sunak in recent speeches. The government have branded this a move beyond protecting all jobs and are referring to this as an attempt to protect “only viable jobs”.
The Job Support Scheme (JSS) operates differently for businesses which are ordered to close by law because of Covid – more below.
THE JOB SUPPORT SCHEME
In order to qualify, workers must work for at least 1/3 of their normal pre-COVID-19 hours. Workers cannot be 100% furloughed any longer. In addition, workers cannot be made redundant or put on notice while a Jobs Support Scheme (JSS) grant is being claimed on their behalf (no further details on how this works in practice, whether you can take someone off the scheme then make them redundant, the guidance is unclear and as of yet there is no detailed publication). The difference between pre-Covid hours and hours worked is the time the Job Support Scheme (JSS) applies. Under the rules the hours where the employee is furloughed are divided into 3 blocks. 1/3 must be paid by the employer. 1/3 will be topped up by the government (This will be paid in arrears with the portal to claim not available until early December) 1/3 will not be paid to the employee. While not 100% confirmed, the wording seems to suggest that you will still have to pay employer’s NIC and auto-enrolment pensions and the government will not contribute to this.
The BBC have put together an illustration of how this will work. In practice the employee will get at least 77% of their pay even if they are only working for 1/3 regular hours on the Job Support Scheme. The employer ends up paying 55% of their regular wages in this situation.
THE JOB SUPPORT SCHEME IF YOU ARE ORDERED TO SHUT BY LAW
Stormont have announced today that if your business is legally required to shut as part of local or national restrictions that the Job Support Scheme (JSS) will be much more generous. If you are legally ordered to shut, the government will pay 2/3 of all employees’ salaries up to a maximum of £2,100 per month. You will not be required to contribute to wages and will only be asked to cover NICs and pension contributions. Businesses will only be eligible to claim this grant if they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
This is a devolved matter so the Welsh or Scottish Governments may apply this scheme differently. As always, we’ll do what we can to keep you informed once the government publishes the promised detailed guidance.