This article is now out of date due to the Furlough Scheme being extended.
HM Treasury announced yesterday (22.10.2020)that the Government contribution to employers’ wage costs under the Job Support Scheme (JSS) will be increased. Employers will be expected to pay 5% of the cost of unworked hours instead of the 33% originally announced.
In essence, the new JSS provides:
- Employees need not have been previously furloughed (but must be on an employer’s PAYE payroll on or before 23 September 2020).
- The Scheme is open on 1 November 2020 and initially lasts six months.
- For at least the first three months of the Scheme, employees must work at least 20% of their usual hours and their employer needs to pay them as normal for these hours. The employee will also be paid in respect of two thirds of any unworked hours (today’s announcement reduces the employer contribution to those unworked hours to 5%).
- Small and medium sized businesses will not be subject to any eligibility criteria, but larger businesses have to show that their turnover is lower now than before the impact of COVID-19.
- Employees cannot be made redundant or put on notice of redundancy whilst their employer is claiming under the Scheme.
- Employers must agree this new short time working arrangements with their staff and make any changes to the Contract by agreement and in writing.
Whilst the JSS will no doubt be a great help for certain employers forecasting a healthy Spring 2021, for others costs may still need to be cut now and redundancies might still be the best route.
If you do require any further advice on this issue or any other employment law concern, please contact our Rebecca Ellerbeck at Rowberrys on 01344 466353.