Job Support Scheme – two key features not to be overlooked

Out-Law News | 06 Oct 2020 | 12:00 am |

Anne Sammon explains two key features of the Chancellor’s new scheme. (view from 5.06 mins)
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  • Transcript

    The government has published the latest in a number of papers which provide further details on the Chancellor’s new Job Support Scheme. This the 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 – it will open on 1 November 2020 and run for 6 months. The latest news is a Factsheet about the scheme has been published, designed to help everyone understand the way the scheme will operate and, crucially, the eligibility criteria. It's useful in so far as it highlights a number of key points which could easily be missed in the more detailed earlier publication called the Winter Economy Plan. The point to grasp is that this new scheme is very different to the current Furlough Scheme which ends on 31 October. So for example, under the new scheme, at paragraph 2.4 of the Winter Economy Plan, it makes it clear that the employee must not be on a redundancy notice. That is in stark contrast to the current Furlough Scheme. To explain, on the line, Anne Sammon:

    Anne Sammon: “One of the key differences between this new Job Support Scheme and the previous Job Retention Scheme is that there's a real focus on retaining viable jobs and so unlike the old scheme, in order for an employee to qualify for payment under the new scheme, they can't be working their notice period. That was a bit of a bone of contention under the old scheme because lots of employees felt that it didn't sit well to be receiving money from the government for something that was called a retention scheme when they were then being terminated through their employment relationship. So I think that's one of the key focuses around the differences between the two schemes that we have. We have a similar issue to the issue that we had with the Coronavirus Job Retention Scheme in terms of there is a date by which employees have to have been on a real-time information submission to HMRC and essentially what that means is on a monthly basis employers will submit this real time information submission to HMRC that has the payroll data for the employees that they're paying and you are only on that if you've been paid for the relevant month. So we have a cut off date that anyone has to have been on that submission on or before 23rd of September 2020. So you may have employees who have started work on, say, 22nd of September, but I've missed payroll cuts off for September so won't be included on the real time information submission and so those employees won't be eligible under this new Job Support Scheme, which may cause some issues for employers.”

    So that's the redundancy notice point. Another one we think needs flagging up is the minimum threshold of hours that an employee has to work. Remember, there are two headline eligibility criteria under the scheme. Firstly the employee must be working at least 1/3 of their normal hours and be paid for that work, as normal, by their employer. Secondly, for the remaining 2/3 of hours, the government and the employer will each pay 1/3 of the employee’s salary. But those hours worked have a caveat attached. Anne Sammon again:

    Anne Sammon: "One of the things that there hasn't been a lot of focus on is the fact that under the scheme at the moment there's this minimum threshold of hours that an employee has to work, and that is that they have to work a third of their usual hours. I think what employers need to be mindful of is that the government has said that that minimum threshold applies for months 1 to 3 of the scheme and that for months 4 to 6 of the scheme that threshold may be different and I think by different what we probably mean is increased. So in the same way that with the Coronavirus Job Retention Scheme employers received much higher amounts from the government at the start of the scheme and didn't have to subsidise things, by the by the time the scheme was ending at the end of October we're looking at employers needing to have made greater contributions. So I think we can anticipate that the minimum threshold hours that employees have to work are likely to increase for the last three months of the scheme."