Furlough Scheme to be replaced by Job Support Scheme
The 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. The scheme will open on 1 November 2020 and run for 6 months.
The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
For the first three months of the scheme, the employee must work at least 33% of their usual hours. The government will review whether to increase the threshold after three months.
Employees will be able to “cycle on and off” the scheme and do not have to work the same pattern each month. However, each short-time working arrangement must cover a minimum period of seven days.
The scheme will be open to all employers with a UK bank account and part of PAYE. All small and medium-sized enterprises (SMEs) will be eligible. However, large businesses must show their business has been adversely affected by Covid-19. Big companies will need to show that turnover has fallen by a third.
The government said it also expected that large employers would not pay dividends to shareholders while using the scheme.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
We are waiting for the finer details to be revealed and will update you in due course.