The UK Government appear to be somewhat quicker off the mark with publishing details about the new Jobs Support Scheme announced earlier today by the Chancellor than they were when the CJRS was first introduced. Two Government publications in particular provide further details; the Job Support Scheme Factsheet and the Winter Economy Plan.
We’ve taken a look at the initial publications and have put together a summary of the key points.
Compliance with Employment Law
One key observation from this initial guidance is that Employers must agree the new short time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
It is essential, therefore, that where Employers are looking to utilise the new Job Support Scheme and introduce short time working, the comply fully with the relevant employment legislation when introducing it with their staff so as to avoid the risk of potential claims at the Employment Tribunal AND falling foul of HMRC and having claims withheld or required to be repaid.
Eligibility for the Job Support Scheme
- All employers with a UK bank account and UK PAYE schemes can claim the grant, but large businesses will have to meet a financial assessment test to determine whether their turnover is lower now than it was before experiencing difficulties from COVID-19. SMEs are exempt from the financial assessment.
- All employees must have been on the employer’s Real Time Information submission on or before 23 September 2020.
How to Claim the Job Support Scheme
- The scheme will be open from 1 November 2020 to the end of April 2021. Employers will be able to make a claim online through Gov.uk from December 2020. They will be paid on a monthly basis.
- Grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
What Can Be Claimed Under the Job Support Scheme
- For every hour not worked the employer and the government will each pay one third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month.
- Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution.
- The minimum 33% threshold hours for which an employee must work may be increased in months 4-6 of the scheme.
- Working patterns can vary, but each short time working arrangement must cover a minimum period of seven days.
- The government’s grant will not cover Class 1 employer NIC or pension contributions, although they remain payable by the employer.
- Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
- HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.
More details of the new Jobs Support Scheme are emerging, as the Government publishes different papers, and we shall continue to review the details as they emerge and provide updates accordingly.
Support for Employers
We can assist Employers with making the necessary changes to the employment contract and ensuring these changes are correctly implemented. Call us now on 0800 612 4772 or Contact us via our website and we will set out clear guidance to assist you to comply with your legal obligations.