In his Winter Economy Plan announced today, Chancellor Rishi Sunak has unveiled a new emergency Job Support Scheme to help protect jobs.
The Job Retention Scheme (also known as the “furlough scheme”) will end as planned on 31st October 2020. Due to the ongoing and unavoidable impact that the Coronavirus pandemic continues to have on our economy, the Government intends to continue its financial support for struggling businesses, which will adapt and evolve to support those affected most.
What is the new Job Support Scheme?
Beginning from 1st November 2020, the Job Support Scheme will span over a six-month period and is aimed at keeping workers in viable and sustainable jobs.
The Scheme involves the Government supporting the wages of people in work (as opposed to the furlough scheme which allowed workers to remain at home), giving businesses the option to reduce the number of hours an employee works and sharing the costs of doing so with the Government, as an alternative to making them redundant.
To be eligible, an employee will have to work at least one-third of their normal contracted hours which will be paid for by their employer. For every hour not worked, the employer and the Government will each pay one-third of the employee’s usual pay. According to the Plan, the Government’s contribution will be capped at £697.92 per month.
Who is eligible?
All SMEs (organisations with 250 employees or less) are eligible to apply for support, and larger organisations will also be eligible to apply if, but only if, their turnover has been adversely affected by the Coronavirus pandemic.
The new Scheme is open to all employees, even if they may not have previously been placed on furlough.
Here is what you should be doing now:
- Review your current furlough arrangements;
- Prepare for the “conversion”. Begin to plan ahead and manage your workforce accordingly;
- Communicate with staff, particularly those on furlough who may have been expecting to return to their work full time in November;
- Prepare to seek legal advice. It may be that like the furlough scheme, you will be required to seek employee consent to being placed on the new Job Support Scheme and have that consent documented in a signed written contract.
Please get in touch if you require advice about whether your business will be eligible for the Scheme, or if you require any further advice in respect of preparing and managing compliance with the eligibility requirements of the new Job Support Scheme.