You can read our previous update on the Job Support Scheme here.
The Scheme had originally only offered support to employers who could provide their employees in 'viable roles' with at least a third of their usual hours. The Scheme then required employers to pay a third of their employees’ wages for hours not worked with the Government subsidising a further third. However, no support was available if there was no work to provide.
The first update has extended the scope of the Scheme to address concerns from employers who are forced to close their businesses due to legally imposed coronavirus (COVID-19) restrictions. Employers affected by local or national directives to cease their operations (presumably in areas designated 'very high' risk under Tier 3) will now be able to claim a grant in respect of two thirds of their employees' wages, whilst they are unable to provide their staff with work. This will include businesses who can only provide a restricted service, such as delivery and collection only because of the restrictions imposed upon them.
However, the extension does not currently apply to employers who close temporarily on public health grounds to contain a specific workplace COVID-19 outbreak at one or more of their sites and who cannot provide work during the isolation period as a result.
The extension at a glance:
- have submitted Pay As You Earn (PAYE) information about their employees to HMRC on or before 23 September 2020 and,
- in compliance with the restrictions imposed on the employers' premises, an employee must be off work for at least seven consecutive days following notification by the employer.
The second update to the Scheme announced by the Treasury yesterday is a change to threshold for what constitutes a viable role and an increase in the Government contribution to employers’ wage costs.
The minimum hours threshold has been reduced from a third to 20%, meaning that an employer will now be eligible for a grant under the Scheme in respect of an employee working just one day of their usual 5 day working week.
Employers will also only be required to fund 5% of an employee's unworked hours (rather than 33%) with the Government increasing its support to 62% of the wages for hours not worked.
Employers utilising the Scheme will continue to be eligible for the £1,000 Job Retention Bonus.
The updates to the Scheme, which received a lukewarm reception when initially announced, provide substantially more support to employers struggling to provide work and pay salaries as a result of the continued impact of COVID-19. There is still a considerable about of detail that is still to be provided as to how the Scheme will operate but the latest updates will be welcome news for many employers.