What is the New Job Support Scheme?
In a nutshell, the Job Support Scheme aims to support those employees who are in work and whose jobs remain viable in the longer term but who are not needed to undertake the normal hours in full at present. Rather than making employees redundant, the Job Support Scheme will enable employers to retain employees on shorter hours as an alternative to redundancy.
How will the scheme work?
- Employees are required to work at least one third of their normal hours.
- The employer must pay the employee for the hours worked.
- The pay for unworked hours is then split into three.
- The employer pays one third of the unworked pay.
- The government will pay up a further third of the unworked hours, subject to a cap of £697.92 per month.
- The remaining third is unpaid.
- Where the government contribution has not reached the cap, the effect is that employees using the scheme will get at least 77% of their salary.
- Class 1 employer NIC and pension contributions remain payable by the employer.
- The employer will be reimbursed by the government in arrears.
- The scheme is to run for six months from 1 November 2020.
- The scheme will be open to all employers with a UK bank account and a UK PAYE scheme.
- Every Small and Medium-Sized Enterprises is eligible, even if they have not utilised the furlough scheme before.
- Large businesses will need to demonstrate that their turnover has dropped during the crisis because of difficulties caused by Coronavirus.
- In addition, large employers will not be able to make capital distributions e.g. dividends whilst using the benefit of the scheme.
- To be able to claim under the scheme, the employee to receive the benefit must not be placed on notice of redundancy.
- Employees to be claimed for must have been on the employer’s payroll either on or before 23 September 2020.
- The threshold of a minimum of 33% hours that an employee is required to work may be increased between the fourth and sixth month of the scheme.
- Each short time working arrangement must last for 7 days or more.
HMRC will check claims and may withhold payment or require repayment where a claim is based on incorrect information. They may prosecute in cases of fraud.
The scheme may assist some industries which are opening on reduced hours at present but are expected to bounce back in the Spring. However, those employees in industries where work has yet to resume will receive little comfort from the above measures, if they are unable to work a third of their normal hours. Many employers can ill afford to pay 55% of pay (33% worked hours plus 22% unworked contribution) when employees are working only a third of their hours. High earning employees will receive less than 77% of pay if their pay exceeds the government cap on contribution.
Therefore, whilst any support is welcome, it will not be sufficient to save a significant proportion of jobs.
New Important Coronavirus Regulations
As the coronavirus figures are rising, so too is the likelihood of employees being required to self- isolate. On Sunday 27 September 2020, new coronavirus regulations were made and are now in force: The Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020.
Why these regulations are important:
- The regulations contain mandatory periods of self-isolation.
- There is an obligation on individuals to notify the Secretary of State of the names of people in the same household if anyone in the household has tested positive for Coronavirus.
- However, the Regulations also impose new obligations on employers. It is now an offence for an employer to knowingly permit a worker, (including agency worker), to attend any place other than where they are self-isolating.
- This includes those who are required to self-isolate because they live with someone else who has tested positive for the virus.
- This means that an employer is responsible for stopping a worker from attending work (except where they can work from home) in the event that they are aware that a worker has tested positive for the virus or lives with someone who has tested positive.
- If an employer fails to do this, they can face a fine which starts at £1,000 and rises to £10,000.
- Workers also required to tell their employer if they are self-isolating.
- It is a criminal offence if an individual breaches self-isolation.
If you would like any further information, please contact Sabrina Rahman on 0114 228 3262 or email@example.com or another member of the employment law team.
If you are concerned your business has made errors in the uptake and administration of the coronavirus job retention scheme (CJRS) or are facing the prospect of a Furlough Fraud investigation by HMRC, our team of Furlough Fraud Investigation Solicitors can offer you tailored legal advice and specialist representation.