Job Support Scheme - Kuits Solicitors Manchester

Job Support Scheme

Job Support Scheme

25th September 2020 - Published by Kuits employment team

Job Support Scheme

With the Coronavirus Job Retention Scheme set to end on the 31 October 2020, the chancellor has announced a new Job Support Scheme to support viable employment in businesses who are facing reduced demand over the winter months due to Covid-19.

The scheme commences on 1st November 2020 and is expected to run for 6 months.

Eligibility for employers:

  • All employers with a UK bank account and UK PAYE schemes are eligible.
  • A financial assessment test will need to be met should large businesses wish to rely on the scheme. Their turnover must be lower than it was before experiencing difficulties to due to Covid-19.
  • Both the Job Support Scheme and the Job Retention Bonus can be used simultaneously provided the eligibility criteria is met for both.

Eligibility for employees:

  • They must be on an employer’s PAYE payroll on or before 23rd September 2020.
  • They must not be on redundancy notice, the scheme explicitly states that those partaking in the scheme cannot be made redundant, however we await further guidance on this.
  • They must be working at least 33% of their usual working hours. The government will re-assess this after 3 months and may increase this figure.
  • The short-time working arrangement must cover a minimum of 7 days. Employees can be placed on and off the scheme.

How does it work?

  • Employers will continue to pay their employees for the hours they work.
  • For the remaining hours that are not worked, but would normally be worked, the government will pay 1/3 and the employer will pay 1/3. The employee will be sacrificing the payment of the remaining 1/3.
  • The treasury provides the following example with an employee who usually works 5 days a week and earns £350 per week (£70 a day). If an employer only required the employee to work 2 days a week, that employee would earn the following:
    • £140 for the 2 days worked;
    • Of the remaining 3 days (usually worth £210), in effect the government would pay 1 day’s pay, the employer would pay 1 day’s pay, and the employee would sacrifice pay for 1 day. This is calculated as follows:
      • 1/3 of hours not worked payable by the employer;
      • 1/3 of hours not worked payable by the government;
      • 1/3 would not be payable with the employee in effect sacrificing said hours.
    • This gives a total payment to the employee of £280 rather than their usual £350 weekly earnings.
  • The government’s contribution is capped at £697.92 per month.
  • NICs and pension contributions remain payable by the employer.
  • The new short-time working arrangements must be agreed with staff and any changes made to the employment contract must be by agreement. Employees must be notified in writing and HMRC may ask to see such written agreement.

Click here for information on the Self Employment Income Support Scheme Grant.

Get in touch with an employment solicitor in Manchester

To discuss your workforce strategies, including the new Job Support Scheme and any restructuring you may be considering, with an expert employment law solicitor, please contact Mark McKeating on 0161 838 7810 or email markmckeating@kuits.com

Subscribe to our mailing list