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So many schemes… which is which?

Job Support Scheme

Written by Martha Mitchell

October 22, 2020

 

On 22 October 2020 the Chancellor set out a further extension to the Job Support Scheme. In his speech to parliament he referred to the “Short time work scheme” so which is which and what are the various schemes?

Coronavirus Job Retention Scheme AKA “The original furlough scheme”

Start Date: 1 March 2020
End Date: 31 October 2020

 

Business Eligibility

  • Businesses are now only eligible if they previously furloughed an employee before 30 June 2020

Employee Eligibility

  • Employees can now only be furloughed if they were originally furloughed before 30 June 2020 and the scheme ends on 31 October 2020.

What Businesses Can Claim For

  • At the height of lockdown, businesses could claim 80% of an employee’s wage back subject to the cap of £2,500 per month.
  • In September 2020 businesses could reclaim 70% but had to top the wages up to 80% (capped at £2500)
  • In August 2020 businesses could reclaim 60% but had to top the wages up to 80% (capped at £2500)
  • Businesses can claim for wages for employees who are now on part-time furlough but only for the hours that they did not work.

How to Reclaim

Remember:

  • Ensure that the agreement to furlough an employee is consistent with discrimination laws
  • Keep a written agreement for 5 years
  • Keep records of how many hours your employees work and how many they are furloughed
  • Furlough has now ended. Nobody can now be furloughed.

Job Support Scheme: Business Is Open

Start Date: 1 November 2020
End Date: 30 April 2021

For businesses who are open but cannot provide 100% of staff hours: they can place their employees on short time working and claim back up to £1,541.75 per employee per month.

Business Eligibility:

  • Employers with a UK bank account and a UK PAYE system can claim
  • There is no requirement to have used the Coronavirus Job Retention Scheme
  • Larger business may need to evidence a downturn in work

Employee Eligibility

  • Must be on the PAYE payroll before 23 September 2020
  • The employee must continue to work 20% of their usual hours (and be paid it by the employer)
  • The employee cannot be on notice of redundancy

What Is The Employee Paid For:

  • The employee will receive 100% pay for the 20% (or more) of hours worked
  • For every hour not worked the employee will receive 66.67% of their normal pay – this is made up of 5% from the employer (up to £125 a month) and 61.67% from the government (up to £1,541.75 a month).

How to Reclaim

  • The 61.67% reclaimed from the government will be payable in arrears
  • Businesses should claim through gov.uk and only in respect of a pay period and after an RTI return has been submitted.

Remember to:

  • Ensure that each period of short time working is for a minimum of 7 days.
  • This is not furlough, this is short time working of 20% of the usual hours.

Job Support Scheme: Business Is Closed

Start Date: 1 November 2020 (announced on 9 October 2020)
End Date: 30 April 2021

For businesses who are forced to close due to a national or local lockdown: they can claim back up to two thirds of each employees wage up to £2,083.33 per employee per month.

Business Eligibility:

  • If a business has to close due to a local or national lockdown.
  • All employers with a UK bank account and a UK PAYE scheme registered on or before 23 September are eligible for the scheme.

Employee Eligibility:

  • Must be off work for a minimum period of 7 days (we are waiting further guidance)
  • More clarification due to be released

What Is The Employee Paid For:

  • The government will pay two thirds of each employee’s salary up to a maximum of £2,083.33 a month
  • Employers can pay more if they choose to

How to Reclaim:

  • Payments will be made in arrears
  • Claim through gov.uk and only in respect of a pay period and after an RTI return has been submitted.
  • In addition, business can apply for a cash grant of up to £3,000 per month (subject to business size) available after 2 weeks of closure

How can Employment Law Solutions help?

Now that the furlough scheme is ending, business should:

  1. Have everybody back at work

If so, please ensure that employees are adhering to social distancing guidelines.

2. Commence redundancies

We have free guides to take business owners through every step of a redundancy process.

3. Have employees on short time working of 20% of their hours

Contact us for letters to engage employees on short time working.

4. Be locked-down due to local or national restriction

Contact us for letters to inform employees not to work and confirm they will receive 66% of their wages

Contact Us

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