New Government Job Support Scheme

As the furlough scheme closes, another jobs support package from the government opens. Many had hoped that the need for the government to support employers and employees during the winter months might not have been necessary, but the resurgence of Covid-19 has led to a rethink.

The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The scheme will open on 1 November 2020 and run for 6 months.

The employer will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the government (through wage support) and the employee (through a wage reduction), and the employee will keep their job. The government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the government contribution has not been capped.

Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria. The Job Retention Bonus is a £1,000 one-off taxable payment to the employer, for each eligible employee that they furloughed and kept continuously employed until 31 January 2021.

The bonus can be claimed between 15 February 2021 and 31 March 2021 and can be retained by the employer. The Job Retention Bonus cannot be claimed until 15 February 2021. The government will update its guidance will by the end of January 2021.

A very important point for employers and employees to note is that employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

Government advice on the various support schemes available is released regularly and employers and employees should consider taking specialist legal advice if they are in any doubt as to their rights or responsibilities.

To discuss this or any other employment related matter, contact us.

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