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Coronavirus (COVID-19) - 'Job Support Scheme' Extension Unveiled

on Friday, 23 October 2020.

Chancellor Rishi Sunak has announced two significant updates to the 'Job Support Scheme' (the Scheme) set to launch on 1 November 2020 as a replacement to the Coronavirus Job Retention Scheme (CJRS) which comes to an end on 31 October.

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.

First Update

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.

Coronavirus guidance employers

The extension at a glance:

  • To qualify for the scheme, the employer must:

-  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 Government will provide a taxable grant to cover employees' normal pay of up to £2,100 per month, paid in arrears.
  • Employers will be able to 'top up' pay to 100% (which is not permitted under the Scheme where there is no enforced closure and the employee is undertaking some of their usual work)
  • Employers will not be required to contribute to employee wages however, they must cover employer NICs and auto enrolment pension contributions.
  • Employers who have not claimed support under the CJRS will be eligible to claim under the Scheme. In addition, employers who access the Scheme but are then subject to a premises closure, can continue to benefit from the Scheme on re-opening of their premises, provided that they meet the relevant criteria of the Scheme.
  • During the claim period, the employer must not make the employee redundant or subject to notice of redundancy. HMRC have confirmed that they intend to publish the names of employers who access the JSS and will give employees to this information, which may be used to verify a claim or report employers abusing the scheme.

Second Update

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.

For specialist legal advice on managing coronavirus in the workplace, please contact Joanne Oliver in our Employment Law team on 07909 547537, or complete the form below.

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