Government steps in to save ‘viable’ jobs

With time marching relentlessly on towards 31 October, the day on which the government’s Coronavirus Job Retention Scheme officially ends, the Chancellor has been under increasing pressure to either extend the scheme or replace it with another financial support programme to minimise job losses as winter approaches. So far, the government has spent almost £40bn to sustain the jobs of 9.6 million employees. Now, it’s set to continue supporting the nation financially with the newly announced Jobs Support Scheme.

Set to commence on 1 November 2020 and ending six months later on 31 March 2021, the scheme is designed to help firms who can’t afford to take workers back full time and provide them with an alternative to redundancy.

How is it different from furlough?

The Jobs Support Scheme differs from the furlough scheme in various ways:

  • In the initial stages of the furlough scheme, employees were not permitted to work at all for their company while on furlough leave (although this changed in later months to encourage firms to bring back workers part-time). However, the stricter eligibility requirements for the Jobs Support Scheme depend on an employee working at least a third of their normal hours from the start.
  • The new scheme is only open to small and medium-sized businesses (although larger enterprises can claim if it can be proven that they have lost income due to coronavirus).
  • Only employees in ‘viable’ jobs can receive help from the scheme. This means that those working in industries that are still closed (for example, nightclub staff) will miss out.
  • Employees can be made redundant at any point while on furlough leave, but firms cannot make an employee redundant or place them on notice while claiming government support under the new Jobs Support Scheme.

How does it work?

As previously stated, an employee must work at least a third (33%) of their regular hours to qualify for the scheme. For these hours, they are to be paid in full by their employer, as normal. For the other 66%, the scheme kicks in, with their employer and the government each paying a third of their remaining wage. When put together, this means that workers benefiting from the scheme will receive at least 77% of their normal pay packet – almost the same as what they would have received while furloughed. The difference is that the government will be paying a lesser proportion – a maximum of 22% of workers’ wages, capped at £697.92 per month – from November through to March 2021.

Grants for businesses

In addition to the Jobs support scheme, a wide range of grants remain available to businesses who retain staff or who provide high-quality work placements and apprenticeships for younger people. These include:

  • A £1,000 ‘Job Retention Bonus’ for employees who retain furloughed staff until at least 31 January

As well as two further grants under the £2bn ‘Kickstart Scheme’ to help younger people into employment:

  • £1,500 to firms who provide an unemployed young adult (16 to 24 years old) with a ‘high-quality’ six-month work placement
  • £2,000 for firms who take on an apprentice under the age of 25 and £1,500 for every apprentice over this age.

Know your responsibilities

As an employer, it’s important to know the responsibilities you have to your employees at this difficult time. Whether you’re looking to make staff redundant or claim assistance from the new Jobs Support Scheme, it’s important to have expert lawyers on hand to make sure you’re up to date with the latest rules. Don’t leave yourself open to litigation – contact us now at employmentlaw@woodfines.co.uk.

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