Following the Government’s announcement on the replacement to the current furlough scheme, we have drafted some notes based on latest UK guidance.
The new scheme called the Job Support Scheme is open to all UK employers and can be accessed irrespective of whether or not an employee has been furloughed previously.
- To qualify employees must be on payroll on or prior to the 23rd September 2020
- The scheme will run for 6 months from 1st November 2020
- The employee does not have to have been furloughed previously
- The employee must complete at least 33% of their normal working hours
- The employer is liable for 33% of hours not worked
- UK Government is liable for 33% of hours not worked
- The employee cannot be made redundant or placed under notice of redundancy whilst on the scheme
- Employees can cycle on and off the scheme as business needs change
In terms of the maths it works out as follows:
- Employee earns £500 per week for working 5 days per week.
- Under the scheme they only work 2 days so would earn 2 days at £100 per day – £200
- The employer then pays the employee 66% for hours not worked or £200
- The employer claims 33% – £100 for the hours not worked back from HMRC
- The employee does not have work a fixed pattern each month as long as they work at least 33% of normal hours
- The minimum period of short-time working should cover a minimum of 7 days
- The Government contribution is capped at £697.92 per month
- Grant payments are made in arrears after the employee has been paid by the employer
- Pay is based on usual wages calculations already used for the current furlough scheme
- The scheme does not cover NI or pension costs and will need to be paid by the employer
As with all things, these are the initial headlines and no doubt further clarification will be provided as time goes by.
If you have any questions about employment law, furlough or restructuring, please feel free to get in touch.
You can find government guidance on the JSS here