EMPLOYMENT LAW

The New Job Support Scheme

On 24th September the Chancellor made a highly anticipated announcement on the future of job retention support in advance of the closure of the Furlough Scheme (CJRS) at this end of this month. The new Job Support Scheme (JSS) is intended to protect ‘viable jobs’ as businesses continue to struggle against depressed demand caused by COVID-19.

This article summarises what we know at this time, as we await further government guidance in the coming weeks.

 

The New Scheme at a Glance

The new scheme will come into operation on 1st November 2020 and run for six months, expiring at the end of April 2021. The JSS narrows both the scope and extent of government support and is a significantly less generous offering than its forerunner. Under the JSS the government will pay a maximum of 22% of an employee’s wages, down from the initial furlough offering of 80%.

To be eligible for the scheme an employee will need to be working at least 33% of their normal hours and have been on their employer’s PAYE payroll since at least 23rd September 2020. Employers will be able to avail of the scheme irrespective of whether they have utilised the existing CJRS scheme or not. A change however, is that larger businesses will have to demonstrate that they have suffered an actual drop in turnover as a result of COVID-19. Small and medium sized enterprises will not have to satisfy this test.

Under the scheme employers will pay an employee for hours worked as standard but the cost of any hours lost due to a reduction in demand will be in part subsidised by the government. An employer will pay for a third of an employee’s lost hours, with the government contributing another third up to a cap of  £697.92 per month. Meaning that an employee working 50% of their normal hours would receive 83% of their normal pay.

‘Viable Jobs’

The fact the scheme is intended to protect only ‘viable’ jobs will undoubtedly prove contentious, generating particular concern in industries where businesses  remain closed as a result of ongoing government restrictions. The Chancellor remained tight lipped about this issue during the press conference but further guidance is anticipated.

Stylistically the JSS marks a shift toward a ‘save what we can’ attitude to job protection and a departure from the extremely generous protection afforded by the CJRS. From a resource perspective employers are left with the difficult task of deciding whether to cut hours or jobs entirely. Employers should be aware however, that they will still be able to claim a £1,000 bonus for every furloughed worker retained until 31st January 2021.

Should you require advice or assistance in relation to any of the above please do get in touch with Jan Cunningham or David Mitchell in our Employment Team.

Please also be aware that the deadline of 20th October 2020 for reporting any furlough overpayments is fast approaching. We provide an audit service to assist employers in this regard. Do get in touch if you need any assistance.

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