Update on the new job support scheme
Since the announcement about the New Job Support Scheme starting from the 1st November 2020 the HM Treasury has clarified certain parts that were causing confusion.
Job Support Scheme rules
- Employees and employers do not have to have previously been part of the Job Retention Scheme to take part in the Job Support Scheme.
- For the first 3 months of the scheme, November – January, employees must work at least 33% of their normal working hours. The government will consider whether to increase this minimum threshold for the remainder of the scheme, February to April 2021.
- Working patterns can vary, but they must cover a minimum of 7 days.
- The costs for any hours not worked, will be split between the employer (pay 1/3), the government (pay 1/3), and the employee (lose 1/3). The governments pay of 1/3 of hours not worked, will be capped at £697.92 per month.
Example of pay
If an employee is working 50% of their normal hours, then:
- Employer pays 50% of wages + (1/3 of 50%) = 67%
- Government pays (1/3 of 50%) = 17%
- Employee sees their pay reduced by (1/3 of 50%) = 17%
(N.B The rounding up of this example does not work to exactly to 100%)
- The scheme ensures employees will earn a minimum of 2/3 of their normal salary. The employer can choose to top this up to full pay if they wish to.
- Employers must pay employees for all hours worked.
- All employees must have been employed by the company and processed on the payroll on or before the 23rd September 2020.
- Employees in the scheme will receive at least 77% of their salary, where the government contribution is not capped.
- Employers will be reimbursed in arrears for the government contributions.
- Large businesses could be eligible for the scheme; however, they will have to have a financial assessment to demonstrate their business has been impacted by Covid-19 to see if they can claim. They must not be making capital distributions while using the scheme.
- All small and medium sized businesses will be eligible without any financial assessment.
- Employers who are claiming under the scheme, will not be able to give employees notice of redundancy and they will not be able to claim for any employee who is working their notice.
- The scheme will not cover Class 1 employer NIC or pension contributions, although they remain payable by the employer.
- All employees will have to give written consent to join the Job Support Scheme as it will involve a deduction of wages and a change to their terms and conditions of employment.
If you would like further guidance or support on this matter please contact Clover HR on 0121 516 0299 or email us at email@example.com