Employment Law Update – Central Changes to the Job Support Scheme – updated 23rd Oct 2020

Employment Law Update – Central Changes to the Job Support Scheme – updated 23rd Oct 2020

Solicitors in Shropshire

Central Changes to the Job Support Scheme

Background

Chancellor Rishi Sunak has this week announced important changes to the Job Support Scheme which the Government hopes will provide additional support to workers and businesses throughout the UK in comparison to the original proposals.  The support comes as part of Mr. Sunak’s ‘Winter Economic Plan’ to save viable jobs and stabilise the economy.

The original Job Support Scheme was unveiled at the end of September as the replacement to the current Coronavirus Job Retention Scheme which ends on 31 October 2020.

The Changes

The previous Job Support Scheme proposals provided that the employee must be working at least 33% of their hours for the scheme to apply.  If the scheme applied, the employee would expect to receive up to 77% of their ordinary wage, with the unworked proportion being paid for by their employer and the Government.  22% would go unpaid.

The new scheme (Job Support Scheme (open)) will now apply where the employee is working at least 20% of their hours.  The wage contributions have also been altered.  The employer will be responsible for payment of the employee’s wage for the time worked as before, however the Government will now contribute up to 49% of the employee’s wage for the time not worked.  The employer will also pay an additional 5% of the employee’s wages for the time not worked.  In total, 27% of the employee’s wages will go unpaid.

An employee should therefore expect to receive up to 73% of their wages under the new Government proposals where the employee earns up to £3,125 per month.

In addition, the new Job Support Scheme will offer cash grants of up to £2,100 per month for business largely within the hospitality, accommodation and leisure industries, which are located within high-level alert areas.  These grants are to be administered by local councils.

Job Support Scheme (closed)

Mr. Sunak has announced no new changes to the ‘Job Support Scheme (closed)’ or ‘Lockdown Furlough’.  They will continue to contribute 67% towards employees’ wages in the event a business is located within ‘Tier 3’ and has been required to close as result of coronavirus restrictions and measurements.  The employee must be working zero hours to be eligible under this scheme.

The below chart from the Guardian shows the differences between the ‘updated’ Job Support Scheme, the old Job Support Scheme, the Local Furlough Scheme (Tier 3 Lockdown) and the original Furlough Scheme.

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If you are either an employer or employee and require advice on the above or the Job Support Scheme please contact Hatchers Solicitors’ Employment Law Team on 01743 248545 or mail@hatchers.co.uk.

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