News | Legal News

24 September 2020

New job support scheme

Chancellor Rishi Sunak has launched a new wage subsidy scheme that will support "viable jobs" with the government subsidising the salaries of employees who can work at least one third of their usual hours. 

The Job Support Scheme (JSS) will start in November 2020 and last for six months, until April 2021.

Sunak said: "The furlough was the right policy at the time we introduced it...but as the economy reopens, it is fundamentally wrong to hold people in jobs that only exist inside the furlough". 

Key points of the JSS

The scheme will only support "viable jobs". To ensure that, employees must work one-third of their hours and be paid those hours by their employers. For the remaining hours not worked, the Government and the employer will each pay one-third of the wages. So, employees working a third of their hours, will receive at least 77 per cent of their wages. 

All SMEs will be eligible for the scheme, but larger businesses will only be eligible if their turnover has fallen during the crisis. 

This scheme is available to all employers, even if they did not use the Coronavirus Job Retention Scheme previously. Employers can claim both JSS and a job retention bonus.

Coronavirus Loan Schemes

Rishi Sunak has also announced that the application deadline for all coronavirus loan schemes has been extended to November 30.

Businesses which have borrowed under the 100pc guaranteed Bounce Back Loan Scheme will be offered the option of more time and flexibility for their repayments.

Under the "pay as you grow" scheme, loans can be extended from six to ten years. Businesses which are struggling can choose to make interest-only payments, and those in danger can apply for a payment holiday of up to six months.

The Self Employed Income Support Scheme grant will be extended to mirror the JSS with a payment that will cover three months of profits from November to the end of January 2021. People will be able to apply for a second grant to cover February to the end of April.

Jo Davis, employment partner, B P Collins said:

“Although this announcement is welcomed, particularly with the furlough scheme coming to an end on 31 October, employers still face a huge dilemma. Do they retain three employees to share the work of one employee, which on the one hand, would cost them more than having just one employee, but on the other, would save them redundancy costs and retain the workforce for when things do start to pick up. Or do they not use the JSS and just keep one employee who would be paid in full. We can help employers to work out what’s best for them.”

Chris Brazier, employment partner, B P Collins adds:

“Despite this announcement, it’s still important to remember that if employers still wish to make workers redundant and need to run a 30-day collective consultation process - which applies when the employer is making make more than 20 but fewer than 100 redundancies at one establishment – they should be aware that the 1 October 2020 is the last date they could start this process.”

B P Collins’ employment team will keep abreast of all new changes in order to help employers make the necessary adjustments ahead of any deadlines. If you have questions on the new scheme please contact Jo Davis or Chris Brazier on 01753 889995 or enquiries@bpcollins.co.uk

Jo Davis

Jo Davis

Tel: 01753 279029 | 07894 608230

Chris Brazier

Chris Brazier

Tel: 01753 279029 | 07891 990980

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