October 2020 update
Whether you call it a second wave or one continuous storm, Covid-19 is at the forefront of every employer’s mind as we enter Autumn. Once again, the government has said employees should work from home if they can, in stark relief to the summer push to get them back in the office. More staff in sectors such as retail and hospitality must now wear masks to stem the rise in infections. Hospitality businesses, such as pubs and restaurants, must shut by 10pm. But the big news for employers came via Rishi Sunak’s Job Support Scheme (JSS) as part of his Winter Economy Plan. It is aimed at safeguarding viable jobs in those sectors of the economy which will struggle over the winter months because of the pandemic.
The JSS will run for 6 months from 1 November 2020. An employee will need to work at least a third (33 per cent) of their normal hours and the employer must pay them for those hours. The remaining two thirds (or 66 per cent) of an employee’s hours are then split again into 3: the government will pay for one third of the remaining hours (22% of their overall contractual hours) and the employer must pay for another third (22%). This means an employee will receive 77% of pay. The government grant is based on the employee’s usual salary, but their contribution will be capped at £697.92 per month. The employer will be reimbursed in arrears for the government contribution.
Only small and medium businesses can take part in this scheme (bigger businesses can take advantage only if their turnover has fallen during the pandemic and the government does not expect them to pay out dividends or similar capital distributions whilst using the JSS). Any small or medium business can use the JSS even if they haven’t previously used the furlough scheme.
No doubt there will be more guidance on the scheme in due course so keep an eye out for the finer detail. Whether the current situation is a tiny ripple or a raging storm, this could be the lifeline that some SMEs need to help them ride out this wave over the winter.