Job Retention: get ready for big changes
If you currently have staff who are on furlough, there will be changes in place from 1st October which require you to make more of a contribution to their wages than before. It is important that you have these contributions in place to avoid fines, writes JOSH RUTHVEN.
As per the plans issued earlier this year, October marks the final month of the Coronavirus Job Retention Scheme, with government contributions being reduced from 70% to 60% capped at £1,875 per month. This means that employers will need to pay the remaining 20% to top up the furlough pay (maximum 20% of £2,500), as well as National Insurance and pension contributions. By the end of October, the scheme will be discontinued and replaced by the Job Support Scheme.
Here are some answers to frequently asked questions on forthcoming developments.
What should I do if I still have staff on furlough on 31st October?
You will need to decide to bring them back on their normal hours, on reduced hours as part of the Job Support Scheme, or make them redundant.
How will the Job Support Scheme work?
It will be in place from 1st November and run for six months. The scheme is intended to encourage employers to bring employees back to work but with the flexibility of offering staff fewer hours. In order to be eligible, staff must work at least a third of their contracted hours, which you as the employer must pay for. The employee is then paid for two thirds of the hours they cannot work, funding for which will be shared between the government (1/3) and the employer (1/3). The governments contribution is capped at £697.92 per month. The employee will receive 77% of their usual pay where funding is not subject to this cap.
National Insurance and pension contributions will still need to be paid by the employer.
Is there flexibility?
Yes. It is possible to cycle on and off but each short time working arrangement must be for a minimum of 7 days.
Who's eligible?
Any employee who was in employment since 23rd September can be put on the Job Support Scheme, whether they have previously been furloughed or not.
All UK employers are eligible but large businesses will be asked to meet a financial assessment. Small and medium businesses will not be required to meet this assessment.
Job Retention Bonus
Another incentive to bring back furloughed employees is the £1,000 Job Retention Bonus. It is available for each furloughed member of staff who is employed until January 2021.
Further guidance from the government on the Job Support Scheme is expected soon and we will update you when it is available.
If you are unsure about what these changes mean for you and your business, please do not hesitate to contact a member of the team by calling on 0115 955 5500 or email at enquiries@pagekirk.co.uk.