The government has just announced the new Job Retention Scheme that will begin on 1st November 2020, following the closure of Flexible Furlough on 31st October 2020.
The key points regarding the new scheme are:
- The scheme will run for six months from 1 November 2020 (ie to end of April 2021) and is open to all employers with a UK bank account and a UK PAYE scheme.
- The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme.All Small and Medium-Sized Enterprises (SMEs) will be eligible; large businesses will be required to demonstrate that their business has been adversely affected by COVID-19 and the government expects that large employers will not be making capital distributions (such as dividends), while using the scheme.
- To be eligible, employees must have been on the employer’s PAYE payroll submission on or before 23 September 2020.
- Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
- In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on an employee’s usual salary, capped at £697.92 per month. Usual salary calculations will follow a “similar” methodology to the Furlough scheme.
- Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped.
- Working patterns can vary, but each short-time working arrangement must cover a minimum period of seven days.
- Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis.
- The employer will be reimbursed in arrears for the government contribution, meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
- The government’s grant will not cover Class 1 employer NIC or pension contributions, they remain payable by the employer.
- The employee must not be on redundancy notice (this suggests that the government will not contribute anything under the new Job Support Scheme if an employee is working under notice of redundancy. That is in contrast to the position under the Flexible Furlough Scheme, where the scheme did pay out for employees working their redundancy notice).
- After 3 months, the Government will consider whether to increase the 33% minimum hours threshold.
- Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing.
- Employers using the Job Support Scheme will still be able to claim the Job Retention Bonus of £1000 in February 2021, if they meet the eligibility criteria.
Additional guidance will be published in due course, however for the time being, the latest fact sheet can be found here: