Following on from Furlough: the new Job Support Scheme

The Chancellor Rishi Sunak has announced a new Job Support Scheme designed to protect the UK economy through what he described as a “difficult winter" ahead. As opposed to extending the current furlough scheme beyond 31 October, the government’s new Job Support Scheme will run for six months from 1 November 2020.
 

The Job Support Scheme will subsidise the wages of people in work, akin to Germany’s Kurzarbeit job subsidy measures. The scheme is intended to provide businesses facing depressed demand due to the pandemic with the option of keeping employees in their jobs on shorter hours, rather than making them redundant.

Workers must work at least a third of their normal hours which will be paid by their employer as usual. To cover the time they are not working, the government and the employer will each pay a third of their usual pay. The Treasury has stated that this means workers will receive 77% of their normal pay. The level of grant will be capped at £697.92 per month, meaning this scheme is only likely to prevent redundancies for those towards the lower end of the wage scale.

The Job Support Scheme will be open to all firms across the UK even if they had not used the furlough scheme previously. Businesses can claim both the jobs support scheme and the jobs retention bonus. The scheme will be targeted at businesses that are most in need such as small and medium-sized firms, and according to Sunak’s announcement will only be available for large companies if their turnover has fallen (although it is not yet clear by what amount).

Further Information

If you have any questions or concerns regarding the topics covered in this blog, please contact Niki Southern, Eleanor Lynch or any member of the Employment Law team.