Yesterday, 22nd October 2020 in Parliament, the Chancellor reduced the minimum hours requirement to 20% and reduced the employer contribution to unworked hours to just 5%.
The Job Support Scheme will start to operate from 1st November and will run for six months, until April, with a review in January. For every hour not worked the employee will be paid up to two-thirds of their usual salary.
See highlighted changes below:
- Employers had to give employees on the scheme paid work for at least 33 per cent of their normal hours. That has now been reduced to 20 per cent.
- Employers had to pay (from their own resources) to the employees on the scheme 33% of wages for hours not worked (except in Tier 3 areas). That has now been reduced to 5%
- The government reimbursed 33% to employers for hours not worked. That has now been increased up to a maximum of 61.67%.
The cap on the government contribution is also raised to £1541.75 per month (from £697.92 announced on 24 September).
As announced on 9 October the government will pay the full 67% of wages for businesses legally required to shut (notably in Tier 3 areas), where there is no requirement for employers to contribute and no requirement to give employees on the scheme paid work.
A number of important questions still remain unanswered:
- We still do not know which businesses can use the scheme – all SMEs but only some larger employers subject to a financial assessment test.
- We are still waiting to find out about holiday, sickness, family-related leave and employees with no regular pattern of hours.
- It appears that employers may still have to pay employer National Insurance and pensions contributions on top, increasing the cost to employers using this scheme.
- We are still waiting to find out if employers will be permitted to top up the payments under the scheme if they wish to be more generous.
Further detail is expected soon, as the scheme starts in only six working days. We will update you further as soon as we have more information.