Legal News | 29.10.20
COVID-19 LEGAL UPDATE: PARTIAL EXTENSION OF THE FURLOUGH SCHEME
As you may already know, the current furlough scheme that has been running since March of this year is due to end on 31 October 2020. Despite this, on 24 September 2020 Chancellor Rishi Sunak unveiled the ‘Winter Economy Plan’, which includes a new Jobs Support Scheme, aimed at providing additional support for struggling businesses.
What does the new scheme provide?
The most significant new measure will effectively replace the current furlough scheme, with the Government subsidising the wages of employees forced to reduce their hours as a result of the pandemic.
Under the terms of the new scheme, the Government have agreed to top up the wages of people according to the type of business. This will now be known as ‘JSS Open’ and ‘JSS Closed’, with the latter designed to support business which were required to close under lockdown regulations. Employers are also able to top up wages beyond the amounts provided for in the scheme.
Under JSS Open, an employee will need to work at least 20% of their normal hours. The employee will be paid for their work as normal, with the state and employers then increasing those wages to cover two-thirds of the pay they have lost by working a smaller number of hours.
Under JSS Closed, the employee will receive two-thirds of their normal wages, funded by the government, with the employer responsible for the NI and pension contributions on that amount.
Who is eligible?
All small and medium sized businesses are eligible, and large businesses are eligible if their turnover has fallen due to coronavirus. Fully funded public sector employers are unable to claim, but public sector employers who receive some funding from private sources can claim if this private funding has been disrupted.
If you would like more specific advice on the impact of the new Job Support Scheme on your business or to discuss your options after furlough, then please get in touch with your usual contact or email: firstname.lastname@example.org.