The Chancellor, Rishi Sunak, has today announced an expansion of the Job Support Scheme (JSS) which will be effective from 1 November 2020 for six months, although it will be reviewed in January 2020.
The current furlough scheme is due to end at the end of October and there has been much concern about how many businesses will survive the harsh winter ahead. In particular, it is expected that some hospitality businesses in parts of the country will be ordered to close completely from Monday. It was feared that this would result in widespread redundancies, as businesses forced to close would not be able to offer any work to their staff and would therefore not be able to make use of the existing JSS.
Today’s announcement may bring some relief as the extension to the JSS will apply specifically to those businesses who are legally required to close as a result of coronavirus restrictions set by one or more of the UK’s four regional governments. The extended version of the JSS will not be available to businesses that are not legally required to close, although the existing JSS will still be available to them.
Under the extension to the JSS employees who work for companies forced to shut by coronavirus laws will get two-thirds (67%) of their wages paid by the Government.
The payments will be up to a maximum of £2,100 per employee per month. It was confirmed that the employer must be instructed to cease work for a minimum of seven consecutive days to qualify for the scheme.
The Chancellor confirmed that smaller employers will not be expected to make any contributions. Larger business will still have to pay around 5% of employee costs through contributions to pension and National Insurance, which will not be covered by the scheme.
It is hoped that these measures will be enough to stave off redundancies over the coming months. Businesses which are forced to close will be able to retain their staff and make use of the extended scheme to pay salary costs. This will hopefully enable them to retain their staff so that they are in a position to re-open quickly when restrictions are lifted.
In addition, it was announced that businesses forced to close in England would receive additional business grants up to £3,000 per month. Extra funding will also be made available to the devolved administrations in Wales, Scotland or Northern Ireland to make similar business grants available if they wish.
A further announcement is expected on Monday 12 October 2020 detailing further measures on local lockdowns.
The government has published a factsheet with further guidance to follow.
Should you require any assistance in relation to the Job Support Scheme or any employment matters generally please contact a member of the Employment Team.