Overview of the Job Support scheme, a new offering from the UK government.
Covid-19 has proven a difficult time for everyone but especially employers.
Whether you've been working hard to understand changes in Covid-19 legislation with regards to the Health & Safety of your employees, putting in place new safety measures and employment support initiatives or just trying to manage your business, retain customers and keep your workforce. It is clear to see that this time has been extremely challenging for employers globally.
One of the schemes the UK government put into place to support small businesses and SME's (Small, Medium enterprises) was the Job Retention scheme which comes to an end at the end of October 2020. The good news is that the government have recognised that the Covid-19 pandemic is still causing employers financial problems and are now introducing a replacement to that scheme.
The new scheme, the Job Support scheme will be available to small and medium sized businesses primarily. Large businesses will also be able to claim but after having a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties.
The new scheme will run from 1st November 2020 for 6 months until April 2021.
Under the new scheme the company will continue to pay its employee for time worked, but the burden of hours not worked will be split between the employer and 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.
An added help is that employers who use the Job Support Scheme will also be able to claim the Job Retention Bonus, if they meet the eligibility criteria. Which would be a one off payment of £1,000 to employers for every employee they bring back to work.
To qualify for the Job Support scheme employees must be on an employer’s PAYE payroll on or before 23 September 2020. In order to support viable jobs, for the first three months of the scheme the employee must work at least 33% of their usual hours.
For every hour not worked by the employee, both the Government and employer will pay a third each of the usual hourly wage for that employee. The Government have capped their contribution at £697.92 a month.
It is worth noting that the Job Support scheme can be applied to the country in areas that have been categorised both Tier 1 and 2, however the government are potentially going to offer a different scheme for Tier 3 categorised areas that have a localised 2 week lockdown. the proposed scheme called the Circuit Breaker scheme, has proposed that the government would cover two thirds of the employee's wages however note this is only in discussions at the moment and nothing has been confirmed as yet.
This is an overview of the Job Support scheme and potential Circuit Breaker scheme however the government have said that full details will be set out in guidance shortly.
For now it would be beneficial for businesses to look at their staffing requirements and in cases where hours are going to need to be reduced, ensure that the selection criteria for identifying what shifts, teams or individuals will be effected is fair, consistent and fully rationalised.
It is also vital that businesses communicate with their workforce demonstrating that they have consulted their employees, explained what changes will be happening and why, ensured that they have agreement from their employees, and also that the whole process has been documented.
Should you need help understanding your obligations and employers responsibilities to your employees, how to avoid indirect discrimination, or even what to do if an employee does not agree to the proposed changes, Seed HR are here to help.
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