Following the Chancellor’s announcement of a new Job Support Scheme released on the 24th September (details of which can be found here), we now have a further update which increases protection for those hardest-hit businesses.
What is the Job Support Scheme?
By way of a recap, the Job Support Scheme was introduced to follow on from the existing Coronavirus Job Retention Scheme (commonly known as the Furlough Scheme) with a view to protecting ‘viable’ jobs through Government contributions towards the wage bill of employees working at least 20% of their regular hours.
With a new three-tier restriction system now in place in England, a circuit-breaker lockdown in Wales and further restrictions expected imminently in Scotland, the Chancellor has expanded the new scheme to provide increased temporary support to those employees who have been instructed to cease work, with a view to protecting incomes and limiting unemployment.
Is my business eligible?
The temporary expansion covers businesses that, as a result of restrictions set out by their respective governments, are legally required to close their premises including those restricted to collection/delivery-only services. In England for example, this would include those within the hospitality sector in Tier 3 areas that have been forced to close their doors, such as pubs and bars. Any businesses that are required to close as a result of specific workplace outbreaks by local public health authorities are not eligible under the expansion.
Employees must be off work for a minimum of seven consecutive days for businesses to be able to apply for the grant, which will be paid monthly in arrears. Eligible businesses can apply from the 1st
November 2020 if their premises have been forced to close, and seek to transition back onto the regular Job Support Scheme if required when restrictions are lifted enabling them to re-open and bring back staff albeit on reduced hours.
As this is simply an extension of the new scheme, it seems likely that it will follow the trend of only protecting ‘viable’ jobs, a term which has no current policy definition and will most likely be decided by the post-lockdown trading conditions going forward. Employers that have been forced to close their doors therefore need to consider, before placing employees on the expansion, whether the jobs they are protecting by doing so are ‘viable’ going forward.
What could my business be entitled to?
The Government will support eligible businesses by paying two thirds (67%) of each employee’s salary up to a maximum of £2,100 per month. This support is only towards employee wages and relevant payroll taxes; employers will have to cover any national insurance and pension contributions due themselves.
The scheme will pay the grant to the employer directly calculated on the number of eligible employees who have been instructed to cease work at their premises.
The intention is to provide a safety net to ensure those businesses forced to close who are unable to offer any work to employees can remain afloat and come back stronger when the restrictions are eventually lifted. This extension and the Job Support Scheme itself will be reviewed in January 2021, and further specific guidance relating to the extension is expected imminently.
For any further advice on how the new scheme itself or the extension may be used to support your business please contact a member of the Burnetts Employment and HR team on 01228 552222 or e-mail firstname.lastname@example.org. Please note that both telephone and video appointments can be arranged.