New Job Support Scheme announced by Chancellor

Caroline Cobain
Legal Director
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Yesterday afternoon, the Chancellor announced that a new Job Support Scheme will be introduced from 1 November 2020 for a six month period until April 2021. The aim of the Scheme is to protect viable jobs in businesses which, due to coronavirus, are anticipating lower demand over the winter.Yesterday afternoon, the Chancellor announced that a new Job Support Scheme will be introduced from 1 November 2020 for a six month period until April 2021. The aim of the Scheme is to protect viable jobs in businesses which, due to coronavirus, are anticipating lower demand over the winter.

In order to benefit from the Scheme, employees must work at least one third (33%) of their normal hours for the first three months of the Scheme and be paid for those hours by their employer. The Government shall review this minimum hours requirement after three months of the Scheme.

For the hours not worked by employees, the Government and the employer will then pay a third each of the employee’s usual wage. The Government’s contribution will be capped at a maximum of £697.92 per month. As a result, employees who are back at work on reduced hours, will receive a minimum of 77% of their normal pay (where the Government cap does not apply), subject to their agreement.

The Scheme will be available to all businesses throughout the UK, including those who have not taken advantage of the Coronavirus Job Retention Scheme subject to them having a UK bank account and a UK PAYE scheme. That said, large businesses will have to meet a financial assessment test before being able to benefit from the Scheme. Employers can benefit from both the Job Support Scheme and Job Retention Bonus if they meet the eligibility requirements.

In order to be eligible for the Scheme, employees must have been on the employer’s PAYE payroll and a Real Time Information submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020. Employees do not have to have the same working pattern each month but each short time working arrangement must cover a minimum period of seven days. In addition, employees will be able to rotate on and off the Scheme. During any period where an employer is claiming a grant for an employee, the employee cannot be made redundant or put on notice of redundancy.

Employers must agree any short time working arrangement with their staff and confirm this in writing. We will be assisting our clients with correspondence that requires to be issued in this regard.

Grant payments from the Government will be made in arrears each month to reimburse the employer for the Government’s contribution. It has been confirmed that employers will be required to pay class 1 employer NICs and pension contributions.

The Treasury have released a factsheet with further information about the Scheme which can be accessed here.

If you would like to discuss the above, or you require support or advice on any other employment law matters, please do not hesitate to contact a member of the team on 0141 331 5150.

Topics: Coronavirus