Out-Law News | 15 Oct 2020 | 1:36 pm | 2 min. read
The UK government will pay two-thirds of salaries for businesses forced to close their doors over the winter months due to coronavirus restrictions in an expansion of its Job Support Scheme.
Chancellor Rishi Sunak announced last week that the government will now support closed businesses by paying 67% of the salary for employees unable to work, up to a maximum of £2,100 per month.
The job support scheme was initially announced in September, to help employers keep staff in work once the Coronavirus Job Retention Scheme (CJRS) comes to an end on 31 October.
The expanded scheme is available to businesses that are legally required to close their premises due to national or local restrictions, and where employees are told to cease work for a minimum of seven calendar days. However, it will not be available for businesses told by local public health authorities to close due to specific workplace outbreaks of Covid-19.
Dr Anne Sammon
Employers need further information and clear guidelines around this otherwise we may see a number of difficult cases arising
Employment law expert Anne Sammon of Pinsent Masons, the law firm behind Out-Law, said the scheme still raised a number of questions and further guidance was required.
“Where, for example, a retailer has to close because of local restrictions, the staff who work in that particular branch would seem to be in scope, but what about the support functions for that specific region, like the human resources person? In theory, they may be able to carry out their role from home but have little to no work to do, so will an employer benefit from the government funding for their wages too? Employers need further information and clear guidelines around this otherwise we may see a number of difficult cases arising,” Sammon said.
In an explanatory note (3 page / 72KB PDF) about the expansion of the scheme, the government said the scheme must be used to cover wages and payroll costs. Employers will have to cover employer national insurance and pension contributions in full.
When the scheme was announced in September, it was only available for businesses that remained open. In these cases, both the government and the employer will pay one third of an employee’s usual pay, with the government's contribution capped at £697.92 per employee per month, where an employee is still working at least 33% of their usual hours.
Employers accessing the scheme do not need to have used the CJRS previously. The government said its expectation was that large employers using the job support scheme would not be making capital distributions while accessing the grant.
HM Revenue & Customs is to check claims, and will also publish the names of employers using the scheme.
The scheme will open on 1 November and be available for six months, with a review in January 2021.
Meanwhile the government is also doubling the maximum local restrictions support grants available. Businesses will now receive up to £3,000 a month instead of £1,500, and they will be eligible for payment after two weeks of closure instead of three, as previously announced. Grants are scaled depending on properties’ rateable value.
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