On Thursday 24th September 2020, UK Chancellor Rishi Sunak announced the new Job Support Scheme (JSS). With furlough leave due to come to an end on 31st October 2020, this announcement was much anticipated.
A number of employers have been in touch with us here at ViewHR with questions about the new scheme. Here are the top questions we have been asked in recent days:
Is the pay employees receive the same whatever they work, like with flexible furlough?
No. Employees have to work at least 33% of their normal hours to qualify for the scheme, and will receive at least 78% of their normal wages.
This is calculated as follows:
- Their employer must pay them as normal for any hours that they work. – Pay for the remaining time that they do not work is then divided into thirds. Employers pay one third of the wages, the government pays another third, and the final (almost) third is unpaid. This means that the amount an employee receives increases depending on how much they work.
How does the maths work in practice?
Employee A is able to return to work for 33% of their normal working hours (the minimum amount).
Their employer pays them for 33% of their normal wages for the time they work. The remaining 67% of their wages for the time they do not work is divided into thirds, meaning that the government pays 22% and the employer pays an extra 22%. The employee therefore receives 78% (thanks to rounding-up) of their normal wages, and the employer pays 55% of that. The remaining 22% is unpaid.
Employee B is able to return to work for 50% of their normal working hours. Their employer pays them 50% of their normal wages for this. The remaining 50% that they do not work is divided by three, and the government and employer pay the employee a further 17% each. The employee receives 83% of their normal wages (with rounding-down this time), and the employer pays 67% of that. The remaining 17% is unpaid.
Is the scheme available for claims straight away?
The scheme opens on 1st November 2020, and ends on 30th April 2020. Employers can claim via gov.uk from December, on a monthly basis.
Do employees have to have been on furlough leave under the Coronavirus Jobs Retention Scheme to qualify?
No. Furthermore, the government guidance states that subject to the eligibility criteria already announced, which includes having made a claim for furlough leave under the coronavirus job retention scheme, employers who use the job support scheme will also be eligible for the Job Retention Bonus.
What if there is a need to place an employee at risk of redundancy?
The government guidance states that “Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.” This is different from furlough leave. However, the guidance does not exclude undertaking a redundancy consultation during the time employees are on the scheme.
Do I need to put anything in writing?
Yes, once the new arrangements have been agreed with the employee(s), a written confirmation to vary the employment contract should be provided and signed by the employee(s).
The government guidance points out that HMRC may ask to see the agreement, as: “HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information.” Presumably, they are keen to point this out following numerous allegations of fraudulent furlough leave claims.
Will the scheme work for my business?
It is fundamental to get grasp the Excel spreadsheets on this one. Ultimately you will need to do some serious analysis as to the viability of the scheme, cash flow, and projected work. As we said, the employee must work 33% of the time. It should certainly be a serious consideration before embarking on redundancies, lay-offs, short-time working measures. There are lots of comparable costs to look at. The full government guidance at the time of writing this blog is available by clicking here.
For a discussion about how it applies to your business, please contact a member of the View HR team.