More support for employers

As companies struggle to stay afloat, many employers are feeling backed into a corner and left with no alternative, but to make some positions redundant. This is especially critical as the furlough scheme comes to an end at the end of the month.

Nobody wants to cut their staff, but if there isn't enough work, it has to be a practical solution, no matter how uncomfortable for everyone. However, the government are still trying to help and the latest strategy is the Job Support Scheme, which comes into effect on 1st November.

This is, effectively a 3-way collaboration between the employer, the employee and the government and aims to support industries who have suffered from lack of trade due to COVID-19.

The collaboration means that:

  • The employer pays hours worked - even if that is far fewer than normal - plus one third of hours not worked.
  • The government pays a third of hours not worked (to a cap of £697.92 per month).
  • The employee agrees to live with the resultant reduction in total pay.

To qualify the employer must have a UK bank account and PAYE scheme and be able to demonstrate a significant loss of trade due to COVID-19. Larger organisations will need to undergo a financial means test - so those who are experiencing difficulty get the help they need to stay in business.

The employee will end up with at least 77% of their wages, which will give them more than they would get if they were out of work - and also, potentially, allow them to keep their job as the economy recovers.

The employee must have been working for the employer from 23rd September or earlier. The scheme will run for six months, and the employee must work at least a third of their normal contracted hours during the first three months. Any employee on this scheme cannot be made redundant during the period the employer is claiming for them.

Payments to employers will be commencing in December and paid monthly in arrears and can be claimed by the employer online via gov.uk.

There are additional details available in the Job Support Scheme Checklist here.