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COVID-19: Looking at help for employers after furlough COVID-19: Looking at help for employers after furlough

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Oct 20

COVID-19: Looking at help for employers after furlough

Written by Sally Togher
Senior Associate

DDI: 01423 724613
M: 07892 792453
E: sally.togher@raworths.co.uk

Information correct as at 6 October 2020

The furlough scheme, officially the Coronavirus Job Retention Scheme (CJRS) was introduced to cover the wage costs of employees from 1 March 2020 and ends on 31 October 2020.  The government has now introduced the Job Support Scheme to help employers who continue to be affected by COVID.

The new scheme starts on 1 November 2020 for six months and its intention is to support viable jobs which are facing lower demand due to COVID. The scheme therefore covers hours not worked by the employee rather than hours worked.

Detailed guidance is awaited but what we know so far is:

  • Employees will need to work for a minimum of 33% of their usual hours. For the time worked, employers must pay employees their normal pay.
  • For hours not worked, the burden of cost will be split between the employer, the Government (through wage support capped at a maximum of £697.92 per month) and the employee (through a reduction of wages). The aim is that employees will receive a minimum of 77% of their normal wages where the Government contribution has not reached the cap.
  • All employers with a UK bank account and PAYE system can access the scheme, even if they never used the CJRS. Large businesses however will have to meet a financial assessment test.
  • The scheme will only apply to employees who are on the employer’s PAYE systems on or before 23 September 2020.

 

The new scheme is welcome although there are some distinct differences to the furlough scheme.  Primarily, employers will have to provide some work for staff and their contribution will be significantly higher. Further differences are that there is uncertainty as to whether employers will be permitted to top up the employee’s pay and employers will not be permitted to use the scheme if employees are under notice for redundancy.

Employers will need to ensure they reach agreement with their employees using the new scheme and record their agreement to a wage reduction. This is crucial to avoid tribunal claims and is also an HMRC requirement.

Additional help for employees includes:

Job Retention Bonus

A payment of £1,000 for each employee brought back from furlough and employed until at least the end of January 2021, subject to minimum monthly earnings of £520.

Kick Start Scheme

A job creation scheme for young people on Universal Credit aged between 16 and 24. The government will cover the cost of 25 hours work a week at the applicable national minimum wage rate for a six month job placement.

Training and Apprenticeship Payments

 A payment of £2,000 for each young apprentice employed under the age of 25 and £1,500 for each apprentice aged 25 or over.

For further information please contact Sally Togher, Senior Associate in Raworths’ Employment Team.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

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