14/10/20 New Job Retention Scheme November 2020
New Job Support Scheme – Starting 1st November 2020
The new Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce.
How does it work?
- The company will continue to pay its employee for time worked, but the burden of hours not worked will be split between the employer and the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
- Employees would need to work a minimum of a third of their usual hours, and paid for those hours by the Employer
- The Government will pay a third of hours not worked up to a cap, with the employer also contributing a further third.
This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
Employees would need to agree to go on the scheme and accept reduced wages.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
The scheme will open on 1 November 2020 and run for 6 months, until April 2021.
Hours Employee Worked 33% 40% 50% 60% 70%
Hours Employee Not Working 67% 60% 50% 40% 30%
Employee Earnings (% of normal) 78% 80% 83% 87% 90%
Gov’t Grant (% of normal wages) 22% 20% 17% 13% 10%
Employer Cost (% normal wages) 55% 60% 67% 73% 80%
Job Support Scheme expanded to firms required to close due to covid restrictions.
The Government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restrictions, the Chancellor announced 9 October.
The Government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
We will continue to keep you updated with any new Government measures that will affect you and your business. In the meantime an article on the Chancellors winter plan is available to read on our website: Winter Economy Article.