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The Chancellor has announced a new Job Support Scheme to replace the Coronavirus Job Retention Scheme when it comes to an end on 31 October 2020.

Under the new Scheme, the Government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand. Further guidance will be published in due course, however, details of the Scheme are set out in the Government’s Job Support Scheme factsheet which is available here:

The key points are:

  • The scheme will open on 1 November 2020 and run for 6 months, until April 2021;
  • For the first three months of the scheme the employee must work at least 33% of their usual hours. (After 3 months, the Government will consider whether to increase this minimum hours threshold);
  • For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee;
  • The Government contribution will be capped at £697.92 a month;
  • Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution;
  • The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer;
  • Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee;
  • All employers with a UK bank account and UK PAYE schemes can claim the grant;
  • Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme;
  • Large businesses will have to meet a financial assessment test;
  • There will be no financial assessment test for small and medium enterprises;
  • Employees must be on an employer’s PAYE payroll on or before 23 September 2020;
  • The variation to the employee’s contract, hours and pay will need to be agreed in writing.

Government Example:

Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).

Her employer pays Beth £140 for the days she works. And for the time she is not working (3 days or 60%, worth £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.

The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job.

Should you require any further information or advice on dealing with specific issues (such as the above) or employment matters generally, please contact any member of the Employment Law Unit:-                                                             

Tel: 028 9024 5034

Copyright 2020 Elliott Duffy Garrett

Every care has been taken in the preparation of this bulletin; readers are advised however to seek legal advice in relation to specific issues.