Update on Job Support for Employers

|

The existing Job Retention Scheme (referred to as furlough), comes to an end on 31 October 2020.  From 1 November 2020 there are two new schemes running for 6 months – the Job Support Scheme Open and the Job Support Scheme Closed. In this article, our partner Nicky Gleadow at The HR Point explains both schemes and how to utilise them…

The purpose of these schemes is “to support viable UK employers who face lower demand due to COVID-19, and to keep their employees attached to the workforce.”.

The schemes are open to small and medium sized enterprises – defined as entities with under 250 employees on their payrolls.  Large businesses who wish to use the schemes will have to meet a financial assessment test – full details to be released shortly.

Important – this must be confirmed in writing and records kept for 5 years.  You need to record hours worked and hours not worked.

  Job Support Scheme Open Job Support Scheme closed
Business Eligibility All employers with under 250 employees.  Larger organisations who pass a financial impact assessment test All business required to be closed due to local or national restrictions

Does not apply to business who have to close due to a workplace outbreak

Details Employees have to work a minimum of 20
% of their normal hours.The Employer pays them for these hours plus 66.67% of their normal pay for the unworked hours – split 5% paid by the employer and 61.67% paid by the government.  Giving the employee a minimum of 73% of their normal pay.

 

Employees can work more than 20% of their normal hours.

 

Employers can top up the pay

 

Capped at a Government contribution of £1541.75 per month

Employees who’s workplace is closed and they have been told not to work will be paid two thirds of their normal pay – capped at £2083/33 per month.
Who can you claim for Employees on payroll between 6th April 2019 and 23rdSeptember 2020.

Employees had to be on your payroll at 23 September 2020.

There is a minimum claim period of 7 days.

When can you claim? From the 8th December.  It is paid monthly in arrears.

You will have had to processed payroll and paid the employee.

What is normal pay? The amount an employer should use for calculating an employees’ reference salary is made up of the regular payments they are obliged to make, including:

·       regular wages

·       non-discretionary payments for hours worked, including overtime

·       non-discretionary fees

·       non-discretionary commission payments

·       piece rate payments

Calculations cannot include:

·       payments made at the discretion of the employer or a client, where the employer or client was under no contractual obligation to pay, including:

·       any tips, including those distributed through troncs

·       discretionary bonuses

·       discretionary commission payments

·       non-cash payments

·       non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

 

Reference salary for employees with fixed pay

For employees who are paid a fixed salary, the Reference Salary is the greater of:

·       the wages payable to the employee in the last pay period ending on or before 23 September 2020

·       the wages payable to the employee in the last pay period ending on or before 19 March 2020, this may be the same salary calculated under the CJRS scheme

 

Reference salary for employees with variable pay

For employees whose pay is variable the Reference Salary is the greater of:

·       the wages earned in the same calendar period in the tax year 2019 to 2020

·       the average wages payable in the tax year 2019 to 2020

·       the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

 

What is usual hours? For employees contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, usual hours are calculated based upon the greater of:

·       the hours that the employee was contracted for at the end of the last full pay period ending on or before 23 September 2020

·       the hours that the employee was contracted for at the end of the last full pay period ending on or before 19 March 2020, this may be the same number of hours calculated under the Coronavirus Job Retention scheme (NB. if employees moved to part time working, this may be varied full details will be included in forthcoming Guidance)

This should include hours paid as annual leave and statutory leave.

 

Usual hours for employees whose hours of work vary The variable hours calculation applies if either:

·       the employee is not contracted to a fixed number of hours

·       the employee’s pay depends on the number of hours they work

For employees whose number of hours varies and/or whose pay depends on the number of hours they work, the number of usual hours is calculated based on the higher of:

·       the number of hours worked in the same calendar period in the tax year 2019 to 2020

·       the average number of hours worked in the tax year 2019 to 2020

·       the average number of hours worked from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

This should include hours paid as annual leave and statutory leave.

The calculation of usual hours is not and cannot be altered if the employee is expecting to work more or fewer hours than this in the future.

 

 Help??

Confused?  Need help?  The good news is The HR Point are on hand to help.  They have Job Support Agreements for both schemes available under our agreement with them.  They also have a calculator to help you work out those complicated figures! Simply email mia@thehrpoint.co.uk and say you are a MIA member, and the team will be able to help you.