Changes to the new Job Support Scheme
29 October 2020
The new Job Support Scheme
Last month the Chancellor of the Exchequer outlined the basics of how the new Job Support Scheme, the Government support provision that will follow the Coronavirus Job Retention Scheme (CJRS), would work. We detailed the key points in our previous article, however, this month significant changes were announced. The Government has acted in response to calls for increased support over the winter months, to try to protect jobs as the new tier system and changing infection rates impact trade. We expect further information to be released at the very end of October and will update you on this in due course.
What has changed?
1) Minimum hours that employees and eligible workers need to work has decreased
Employers will now be able to claim under the Job Support Scheme if their employees are doing at least 20% of their normal working hours. This is equal to 1 day per week, where a 5-day week is usually worked. Initially the minimum had been set at employees working one-third of their normal working hours.
Employees will be able to do training in working hours while being claimed for under the Job Support Scheme. Hours that employees spend training are paid for by the employer at their full rate of pay and count towards the 20% of their usual hours of work.
2) Employer and Government contribution for hours not worked in open businesses
Employers will now need to contribute 5% of employees non-worked wages rather than 33% as was initially required. This is up to a maximum of £125 per month, with the discretion to pay more than this if they wish. Employers will still need to pay the employee their normal wages for all hours worked.
The Government will pay 61.67% of each employee’s hours not worked, up to a maximum of £1,541.75 per month. The example provided in the Government guidance is that where an employee is paid £587 for their unworked hours, the Government would contribute £543, and the employer would pay £44.
3) Expansion to the offering of business grants
Business grants will be used to increase assistance through existing Job Support and self-employed schemes, particularly aimed at supporting businesses in high-alert level areas of the country. Grants of up to £2,100 per month will be provided, mainly for businesses in the hospitality, hotel/B&B and leisure sectors who are negatively impacted by restrictions in high-alert level areas.
Taxable grants will be made available to eligible self-employed people, and have been increased from 20% to 40% of three months’ average trading profits, with the maximum amount of claim for the first instalment (for 1 November 2020 – 31 January 2021) being £3,750, up from £1,875. Details are still awaited for the level of funding that will be offered for the second instalment.
4) Additional funding for Local Authorities to support businesses in high-risk areas
Higher levels of business support funding will be made available for Local Authorities moving into Tier 3, to support businesses which remain open but which have been affected by the pandemic, at the rate of 70% of the amount given to businesses which have been required to close, up to a maximum of £3,000 per month. There is also an extra budget for Local Authorities to use, for businesses that do not fit neatly into the defined categories provided.
Employers have not been left very much time before the commencement of the new scheme to consider or reconsider whether they will have enough work available to access the scheme, and which employees they will be able to claim for. They will need to assess the viability of keeping staff employed, remembering that they will still be able to claim the Job Retention Bonus in respect of employees they have claimed for under the Job Support Scheme, if they meet the eligibility requirements.
Employers should continue to consult with employees and workers over any changes employers propose to make to working hours and get agreement for these and any new working patterns in writing. They should also listen to and consider alternative proposals for managing working time and pay, especially where employees have caring commitments or disabilities.
If you are an employer dealing with issues arising from the coronavirus pandemic, then we can help. Please call us on 01243 836840 for a no obligation chat, or email us at [email protected].