On 24 September 2020, Chancellor Rishi Sunak announced new plans that the Government would top up the wages of workers who have been forced to cut their hours due to the Coronavirus Pandemic. Many people are now well acquainted with the Furlough Scheme with thousands of businesses and employees benefiting from this over the last few months. The Job Support Scheme will provide assistance to employers and employees over the coming months replacing the Furlough Scheme.
The Job Support Scheme is set to run for 6 months during which time the Government will top up the wages of workers who are working reduced hours due to the coronavirus pandemic. Employers will be required to pay a third of the unworked hours and the Government will contribute a further third (subject to a cap). This means employees will receive pay for the hours that they have worked and between the employer and the Government the final two thirds of their pay will be topped up.
For example, where an employee would ordinarily work 8 hours a day and earn £120.00, if they are only working for 4 hours a day, they would receive £60.00 for the working time. Their usual pay for the hours not worked would be £60.00. One third of this being, £20.00, would be paid by the employer, and a further third of £20.00 would be paid by the Government. Therefore, for an employee earning £120.00 per day they would receive £100.00 on this example.
The Job Support Scheme is open to businesses across the UK whether or not they have previously taken advantage of the Furlough Scheme. However, the Scheme will not be available to employees who have already been given notice for redundancy. Businesses which are eligible are those who are small and medium sized, i.e. fewer than 250 employees. However, large businesses may be able to benefit where their turnover has seen a fall during the Coronavirus Pandemic.
On the 9th October the Chancellor announced that the Scheme would also be expanded to support business across the UK who are required to close their premises due to coronavirus restrictions. Employers under the expansion will not be required to contribute towards wages and will only be required to cover NICS and pension contributions. These businesses can however only claim for the grant whist they are unable to open due to restrictions, and employees must be off work for a minimum of seven days.
Businesses will be able to take advantage of the Job Support Scheme from 1 November 2020 as the Furlough Scheme comes to an end on 31 October 2020. The Government has announced that employers will be reimbursed in arrears for the Government’s contribution.
At O’Donnell Solicitors we can provide advice to both employers and employees to help you keep up to date during the Coronavirus Pandemic. For more information please contact ourselves on 01457 761320 or email email@example.com.