On Friday, Chancellor Rishi Sunak announced an expansion of the new Jobs Support Scheme (JSS) which is due to replace the current furlough scheme on 1 November.
Under the JSS, the State is to contribute one-third of the shortfall of wages for employees who work reduced hours. This is subject to a cap of £697.72 per month and to the employee working at least a third of their normal (pre-furlough) hours. The employer will pay a further third of the shortfall in pay and the employee gives up the final third.
The government had been criticised because the JSS did not address businesses that have to close completely because of national or local Covid restrictions.
This expansion is intended to meet that criticism by granting these firms two-thirds of their employees’ pay, up to £2,100 per month. Under these new measures, employers will not be required to pay anything other than employer National Insurance and pension contributions.
Firms that are required to operate only delivery and collection services (or are forced to serve food and drink outside) are also covered. However, there has been criticism that firms in sectors such as cinemas, events and conferences, which are not ‘legally closed’ but have been forced to ‘shut in all but name’ due to restrictions, will not be covered.
Businesses can claim the new grant only while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days (they can’t do any work for the business but may volunteer or work elsewhere). In line with the rest of the JSS, grants will be paid monthly in arrears, from early December.
The government has said that this extension to the JSS will also last six months but will be reviewed in January. It does not affect the current furlough scheme which, until 31 October, covers firms that are now closed. Neither does it alter the terms of the JSS that have already been announced - or the job retention bonus, the £1,000 payment due in January for each employee who is kept on payroll.
If you require any advice about the JSS or this extension to it, or matters arising from the closure of the furlough scheme, please do contact us.