The Job Support Scheme

Rishi Sunak unveils emergency job scheme as a ‘successor’ to the furlough scheme. 

Mr Sunak’s support package comes two days after Prime Minister Boris Johnson said the country could have to cope with up to a further six months of restrictions, including a 10pm curfew and advice to people to work from home if they can. 

If coronavirus has impacted you or your family and you are unable to return to the workplace full time, the government has now announced that it will work alongside firms and continue to top up your wages with ‘The Job Support Scheme’ (JSS).

This will see workers get three quarters of their normal salaries for six months starting on 1 November. 

This is being introduced as part of a wider “winter economy plan”, Chancellor Rishi Sunak explained, and aims to stop mass job cuts after the Government introduced new measures in order to contain and tackle the rise in coronavirus cases.

12% of the UK’s workforce, which works out at nearly three million workers, are currently on partial or full furlough leave and the support they receive, namely The Job Retention Scheme, will end on 31 October. 

It was announced today that the Government will ‘directly support’ the wages of people in work, giving businesses who face ‘depressed demand’ the opportunity to keep employees on shorter hours, rather than having to let them go. 

This scheme is only available to ‘viable jobs’ as opposed to jobs that only exist because the Government is continuing to subsidise the wages. Mr Sunak said, “the primary goal of our economic policy remains unchanged and it is to support people’s jobs, but the way we achieve that must evolve”. The new scheme is estimated to cost the government £300m a month and a similar scheme for self-employed would be available. 

The Government website states that 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 the employee’s usual salary, capped at £697.92 per month.  The JSS will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course. The plan is designed to sit alongside the Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs. Additionally, the Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Scheme (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face lower demand and less business due to the coronavirus crisis. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.

Self Employed individuals can expect an additional grant, which may be adjusted to respond to changing circumstances, from the period February 2021 to the end of April. Thus, meaning Government support is extending well into the next year.

Let’s put this into context. If a shop assistant earns £400 for six days a week, but now faces being laid off, the scheme would allow for their hours to be reduced to two days per week. The company/shop owner would pay £134 for the days worked, and an additional £88 towards the earnings would cover the days on rest. Another £88 would then come from the Government. The scheme benefits the shop assistant, who will take home about £310 despite working only two days. It is more expensive for the company/shop owner per week, who has to pay about £220 for only two days’ work but is far cheaper than redundancy costs or paying for full time employment. Firms also have the benefit of keeping a trained and valued member of staff who is ready to work when the pandemic eases. 

Key points of how the scheme works:

1.     Under the scheme, the government will subsidise the pay of employees who are working fewer than normal hours due to lower demand.

2.     It will apply to staff who can work at least a third of their usual hours.

3.     Employers will pay staff for the hours they do work. 

4.     For the hour’s employees can’t work, the government and the employer will each cover one third of lost pay. 

5.     The grant will be capped at £697.92 per month.

6.     All small and medium sized businesses will be eligible for the scheme. 

7.     Larger businesses will be eligible if their turnover has fallen during the crisis.

8.     It will be open to employers across the UK even if they have not previously used the furlough scheme.

9.     The scheme will run for six months starting in November. 

We acknowledged that this is an extremely worrying and stressful time for all our readers, and we hope the above assists you. However, if you require any specific or additional legal advice which has not been covered in this article above, please do get in touch using the contact us form.