From Job Retention to Job Support
As the furlough scheme draws to a close, Chancellor Rishi Sunak has stepped in with new support for struggling companies and their employees. Martin Cull from our audit team takes a look at the plans.
On Halloween, the Job Retention scheme will end, which means that your employees can be no longer be on furlough. The government has put in place a Job Support Scheme to replace the Job Retention programme.
This new scheme, which launches for six months on 1st November, will help employees bring back their staff, but for less time, encouraging continued employment rather than redundancy. Workers will get up to two-thirds of wages paid for hours they cannot work. The scheme however does not cover Class 1 employer NIC contributions or employer pension contributions, these remain payable by the employer.
To take advantage of the scheme, your staff must be working at least a third of their contracted hours. You, as the employer, must pay them for this time. The worker is then paid for two thirds of the hours they cannot work, with the government sharing this cost with you equally. As a result, according to HM Treasury, someone who works the minimum of 33% of their hours will be paid for 77% of their wages. Employees will also be able to cycle on and off the scheme, allowing greater flexibility, providing the short-term working arrangement covers a minimum period of 7 days.
The aim is to help employees keep their jobs on shorter hours, if there is not enough work to go round, rather than see their role disappear entirely.
It is important to note that government support will be capped for each employee at £697.92 per month. Anyone who is in employment as of 23rd September 2020 can be put on the scheme and it is not restricted only to people who have been previously on furlough. Even if you didn't use the furlough scheme at all, you're still entitled to take advantage of the latest programme as a small or medium-sized business. Larger businesses will, however, only be considered if their turnover has fallen during the coronavirus crisis.
Employers who join the scheme can also claim the Job Retention Bonus worth £1,000 if they keep staff on until 31st January 2021.
Although it is not yet clear how to apply for the scheme, we will keep you updated when more information is available. If you would like any support through any of the government initiatives, please contact us on 0115 955 5500 or email enquiries@pagekirk.co.uk.