The previous Coronavirus Job Retention Scheme will be replaced by the COVID-19 Job Support Scheme on the 1st November 2020. This scheme will bring about various changes, except for the scheme currently in place for businesses required to close by law.
This scheme obliges employers to pay 5% of the wages for the employer’s unworked hours. Employees who work 1 day per week will also be eligible for this scheme since the minimum hour’s requirement is now 20%.
From November onwards, employers who have a UK bank account and UK PAYE schemes are eligible for this new scheme irrespective of whether or not the entity would have previously benefitted from a scheme and irrespective of whether the employers are subject to lockdown restrictions, but shall not apply to publicly funded organisations. Partially publicly funded entities may be eligible if they satisfy a number of further requirements. A financial impact test will be carried out to determine whether entities employing a significant number of persons (mostly 250+), will be eligible for this scheme. The test will highlight whether the turnover is low or is experiencing difficulties due to the pandemic, depending on the effects thereof.
Ambiguity nonetheless abounds with regards to the employee’s working arrangements for the purposes of eligibility. One thing is for sure: employees with any type of employment contract must have been on their employer’s PAYE payroll at least from 6 April 2019 to 23:59 on 23 September 2020. For the purposes of eligibility, employees need to work a minimum of 20% of their normal working hours, whilst working time spent on training experience during working hours also counts to this aim.
How will payments be made?
- Employees must get paid 2/3 of their usual wage for every unworked hour, which will amount to an average of 73% of one’s regular full wages
- Employers must pay at least 5% of such unworked hours up to a £125 capping per month (or more if they so wish) and the government will pay 61.67% at a capping of £1,541.75 monthly
- Employers must pay the NICs and enrolment pension contributions in full
This scheme applies to those employees who have not been already made redundant or else been given the notice of redundancy during the applicable period of the scheme. It will also apply to employers who want to benefit from this scheme as well as the Job Retention Bonus to keep workers who have been rendered redundant on their payroll until the beginning of February 2021.