New Job Support Scheme from 1 November 2020
The Chancellor, Rishi Sunak, has set out in a statement to the House of Commons the Government’s new Job Support Scheme which shall be in place from 1 November 2020 for 6 months.
The Chancellor confirmed that the furlough scheme will be coming to an end, as planned, on 31 October 2020. He has made clear that the furlough scheme cannot continue in its present form as the Government cannot save every job but that its focus now is seeking to support those jobs which are “viable” as opposed to paying people to stay at home.
As such, the new Job Support Scheme will seek to support the wages of those of those people who are in work but on shorter hours. In a departure from the furlough scheme, the Chancellor has said businesses will not be able to issue redundancy notices to employees who are on the new scheme.
In order to be eligible, employees must work a minimum of 33% of their hours for the first three months of the scheme and for the remaining hours not worked, the government and employer will jointly increase their wages to cover two thirds of their lost pay and the employee will keep their job. So employees working 33% of their hours will receive at least 77% of their pay.
In a factsheet released by the Treasury, it indicates that the government contribution will be capped at £697.92 a month and it reserves the right after three months to consider whether to increase the minimum hours threshold.
All small and medium business will be eligible for this scheme and larger businesses will have to meet a financial assessment test to be eligible (i.e. their turnover needs to have fallen as a result of the COVID-19 crisis).
"All employers can use the scheme, even if they have not used the furlough scheme."
Employees must be on an employer’s PAYE payroll on or before 23 September 2020.
Of course the devil will be in the detail and particular focus will be placed on the eligibility criteria for businesses to qualify for the scheme. It appears that this will be more stringent than the approach taken for the furlough scheme.
We will of course provide further updates once we receive them.
Get in touch
If your business needs legal support with any issues arising from COVID-19, please get in touch with Priya Magar.
All information in this update is accurate at the time of writing. It is meant for general information only and is not legal advice.