In this page you will find useful links and relevant information about the government's Coronavirus job support schemes
Last updated: 29 September 2020
Job Support scheme
On 24 September, the chancellor announced the Winter Economy Plan. On the same day, he also announced that the Autumn budget was cancelled. The Winter Economy Plan outlines several measures concerning the next stage in the roadmap of coronavirus recovery. A much-anticipated element of the plan is the Job Support Scheme, designed to help employers retain jobs over the winter when businesses may not have the demand for services to bring employees back full time. The current furlough scheme comes to an end on 31 October, and the Job Support scheme will be in place from 1 November. Here we outline the key features of the new Job Support Scheme and some additional resources that may be helpful.
What is the Job Support scheme?
From 1 November, a new scheme will replace the furlough scheme. They key points are:
- Employees need to be working a minimum of 33% of their usual hours. The employer will pay the employee for the hours they do work.
- For the remaining hours not worked, the employer pays 1/3 of these, and the government pays 1/3 of them. The remaining third is taken by the employee as a wage reduction, but they keep their job. The government contribution is capped at £697.92 per month.
- Employees will receive at least 77% of their usual pay if they work 33% of their usual hours.
- The grant from the government does not cover Class 1 employer NICs or pension contributions. These will still be payable by the employer.
- All SMEs are eligible, but ‘large businesses’ need to prove that they have been adversely affected by coronavirus. It is not yet clear what constitutes a ‘large business’ or what qualifies as an ‘adverse’ impact on a business; we will update members as soon as we know more.
- Businesses who have not yet used the furlough scheme will be eligible for the Job Support scheme.
This means that for an employee working 33% of their normal hours, the employer would pay 55% of their wages; the government would pay 22%; and the employee would take a wage cut of 23%.
The scheme may help some charities retain key staff while demand for services is low, especially over winter. Additionally, it may act as an additional incentive for businesses to retain employees so that they can access the Job Retention Bonus scheme. However, for many charities demand for services is higher, not lower, but they cannot afford to pay employees 55% of their salary for 33% of their hours after months of reduced income. These measures will also not help employers in areas where additional social distancing measures prevent normal working patterns from resuming.
Job Retention Scheme (furlough): Closes 31 October
Under the new Coronavirus Job Retention Scheme (furlough), government grants will cover 80% (up to a maximum of £2500) of the salary of PAYE employees who would otherwise have been laid off during this crisis.
Employers can choose to top up the extra 20% of the employees’ salary, but they do not have to.
Individuals must agree to being furloughed and be on the employer’s PAYE payroll on 19 March 2020 or before but can be engaged on any type of contract including full-time, part-time, employees on agency contracts, and employees on flexible or zero-hours contracts.
From 30 June, employers will only be able to furlough employees that they have furloughed for a full three week period prior to 30 June. This means that the final date by which an employer could furlough an employee for the first time would have been 10 June, in order for the current 3 week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June
- To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming the CJRS. A record of this communication must be kept for up to six years.
- To claim under the scheme employers will need to designate an affected employee as a “furloughed worker” and notify the employee of this change.
- We recommend you take legal/HR advice from one of ACEVO’s corporate partners, if your employees’ contract of employment does not permit this change in status.
- Until 31 July 2020, HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. However, after this date the grant available for each worker will reduce each month until the Scheme closes on 31 October 2020.
- From 1 August 2020 employers will be required to pay employer’s national insurance and pension contributions (plus any further top-up agreed)
- From 1 September 2020 the government will cover 70% of the salary with employers topping up the 10% and the employer’s national insurance and pension contributions (plus any further top-up agreed)
- From 1 October 2020 the government will cover 60% of the salary with employers topping up the 20% and the employer’s national insurance and pension contributions (plus any further top-up agreed)
- Employees on sick leave or self-isolating cannot be furloughed until after their isolation or sick leave comes to an end.
- Employees on maternity or paternity leave cannot be furloughed.
- Furloughed employees are allowed to volunteer, but not for the organisation that furloughed them.
- Since 1 July the option of ‘flexible furlough’ is available. This will allow employers to bring those on furlough back part-time whilst still claiming for the hours not worked through the CJRS up to the limits detailed above. There is no minimum period an employee can work or be furloughed after 1 July 2020. Claims for rebate may only be made in full weeks.
- Statutory Maternity Pay (and related paternity/adoption pay) operates as normal.
- For staff with variable pay, use the previous month the previous year or annual average.
- There is nothing to stop employees being furloughed on rotation, but you should ensure you already have agreement to do so.
- Wages of furloughed employees are subject to usual tax and NI.
- Freeths provides a Coronavirus helpline and support Hub containing practical, up to the minute guidance on the impact of Coronavirus across a range of areas, FAQs and access to useful articles and events.
- ACEVO members can watch a webinar by our corporate partner Stone King explaining the furlough scheme in more detail.
- Ellis Whittam has produced a step-by-step guide to furlough, download it here.
- Acas has also published guidance about the furlough scheme, please click here
Supporting furloughed staff
The Directory of Social Change has published a page with suggestions on how you can support furloughed staff. The Heart of the City has also published a guide for supporting furloughed staff, organised in two main topics: the view from HR and the view on mental health.