The UK government has updated the Job Support Scheme to help businesses pay their staff when the furlough scheme ends.
Here’s what you need to know to access the fresh funding and keep hold of your skilled workforce.
What is the Job Support Scheme?
It’s a new system that aims to protect jobs in businesses that aren’t legally required to shut but which still face lower demand due to COVID-19.
From 1st November, you’ll be able to offer your staff shorter working hours and claim funding to help pay for some of their wages.
To be eligible, your staff must work at least 20% of their normal hours, and you need to pay them in full for these hours.
Then, for every contracted hour they don’t work, you’ll pay them at least 5% of their usual wages, to a maximum of £125 per month, plus National Insurance and pension contributions.
The government will then pay 61.67% of wages for hours not worked to a maximum of £1,541.75 per month.
How could I use the scheme?
Say you have an employee who normally works 35 hours a week on £10 an hour. But because of the impact of coronavirus, you only need them the work a fifth of their normal time (i.e. 7 hours, roughly one day a week).
Under the new scheme, your employee could work 7 hours per week, and you would pay them their full wages (£70) for this.
Then, for the 28 hours they don’t work, you would pay them 5% of their wages—or £14 per week.
The government will also pay 61.67% of the wages for the hours not worked. In this example, that comes out as £172.68 when rounding up to the nearest penny.
So, the employee who would normally earn £350 per week when they worked full time will now earn £256.68 for working 20% of the week.
You would pay £84 of this, working out as £12.00 for each hour they actually work.
Who can benefit from the scheme?
The scheme will be open to all employers with a UK bank account and UK PAYE scheme.
All small and medium-sized enterprises (SMEs) can access the new funding without question.
Larger businesses will be able to apply too, but they’ll need to show that their turnover has fallen due to COVID-19.
Which employees can I use the scheme for?
First, a worker must’ve been on your payroll on or before 23rd September 2020 for you to access funding for them.
The employee must also agree to the shorter hours and any changes to their contract before they start their new work pattern. You’ll need to confirm these changes in writing, too.
Employees will be able to ‘cycle on and off’ the scheme and don’t need to work the same pattern every month. But each short-time working arrangement must last at least seven days.
And you can’t make someone redundant or give them a redundancy notice while using the scheme. Otherwise, you’ll lose access to their funding.
How do I apply for the scheme?
The scheme will open on 1st November 2020 and last until April 2021. You’ll be able to make your claims on the government’s website from December.
The government will pay you the grants every month and in arrears. So, you’ll need to have enough cash on hand to pay your workers before you get the funding.
After three months, the government has said it might increase the minimum portion of hours (currently a third) that your workers must work to be eligible.
So, make sure you regularly review your use of the scheme to check it’s still worth your while, and keep an eye out for relevant government updates.
Where can I find out more?
The government is still releasing details on how the Job Support Scheme will work.
But while we wait for more info and for the scheme to open, thousands of employers need support today.
That’s why Peninsula clients get unlimited 24/7 HR advice to help you overcome every workplace challenge.
But even if you’re not a client, you can still claim a free advice call to help you protect your business through the tough months ahead.
So, to get expert advice on the latest government funding or learn the safest ways to cut your staff costs, call our HR helpline for free today on 0800 028 2420