The Job Support Scheme will replace the Coronavirus Job Retention Scheme which closes on 31st October 2020. The Job Support Scheme will come into effect from 1st November 2020.

The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce.  Under the scheme, a grant is available from HM Revenue and Customs to reimburse the employer for a portion of an employee’s wage costs, provided that the employee is working a minimum number of hours.

Eligible employees must have been on their employer’s payroll on or before 23 September 2020 and the scheme is open to UK employers that are small or medium sized or are large and have a reduced turnover because of coronavirus.  Large employers will be assessed by a financial test.

Under the Job Support Scheme, employees have to work a minimum of one-third (33%) of their usual contractual hours and will be paid their usual earnings by their employer for these hours worked.

For hours not worked, employers must pay the employee two-thirds of their usual earnings. Employers must fund one-third of the employee’s usual pay for the unworked hours. Employers are able to claim reimbursement from HM Revenue and Customs for one-third of the employee’s usual pay for the unworked hours, up to a cap of £697.92 per month. The remaining one-third of the employee’s unworked hours are unpaid. This means that employees, whose earnings have not been capped, will receive at least 77% of their usual pay. More details on this can be found at: https://www.gov.uk/government/publications/job-support-scheme

Businesses legally required to close

In addition, the Job Support Scheme now provides financial support for businesses that are legally required to close under new coronavirus restrictions.  For example, in a local Tier 3 lockdown or national lockdown. In these circumstances, employers are able to claim a grant from HM Revenue and Customs to cover 67% of employees’ pay, up to a maximum of £2,100 a month per employee.

Employers can claim for employees who do not work for at least seven consecutive days due to the closure of the business. In this scenario, the employer is responsible for paying pension and national insurance contributions but is not required to contribute towards the employees’ pay.  More details on this can be found at: https://www.gov.uk/government/news/job-support-scheme-expanded-to-firms-required-to-close-due-to-covid-restrictions

Job Retention Bonus

The Government are also helping employers to avoid redundancies by offering employers the one-off Job Retention Bonus.  Eligible employers will receive a £1,000 bonus for every employee who has been furloughed but is continuously employed until the end of January 2021.  Eligible employers will be able to claim this bonus in February 2021.  More details can be found at: https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021

If you would like to discuss this topic in more detail or would like more information, contact Ramshaw HR today.