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:
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:
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.
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.
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.