On 24 September 2020 the Chancellor, Rishi Sunak, announced the successor to the furlough scheme which will end on 31 October 2020 – the Job Support Scheme. The Job Support Scheme that will commence on 1 November 2020 and last for 6 months.
What is it?
The aim of this scheme is to protect viable but vulnerable jobs
The Job Support Scheme will enable employers to reduce their employee’s hours, in agreement with the employee, in order to avoid making them redundant. The employer needs to pay the employee for the hours they work, at their usual rate of pay. The employer and Government will then each pay a third of the remaining ‘lost’ hours with the employee taking the final third as a pay reduction. The Government states that an employee working a third of their normal hours should overall receive 77% of their full pay. The Government’s contribution is capped at £697.92 per month.
Who is eligible?
Employees must work at least 33% of their normal hours and be on the payroll on or before 23 September 2020.
Employees at all small and medium-sized businesses will be eligible for the new scheme. Larger businesses will only qualify to use the scheme if their turnover has been adversely affected by Covid-19. However, the Government expect that large businesses will not be making capital distributions such as dividends if they use this scheme.
The scheme cannot however be used to subsidise employees already on notice of redundancy and employers cannot put employees on notice of redundancy whilst they are using the scheme.
The Scheme is open to businesses even if they have not previously used the furlough scheme.
For further guidance please see https://www.gov.uk/government/publications/job-support-scheme
How we can help you?
We can help employers by providing advice on the employment law implications of this scheme.
We can also help if you are an employee.
Information accurate as at 24 September 2020