Orr Litchfield

Solicitors and Business Lawyers

Covid-19 (Coronavirus) and the Job Support Scheme

Introduction 

On the 24th September 2020, the UK Government announced that it would be introducing a new scheme to support jobs in the UK with effect from 1st November 2020 – the Job Support Scheme.

Essentially, the new Job Support Scheme will replace the Coronavirus Job Retention Scheme (‘CJRS’) as a method for supporting jobs. The CJRS permitted qualifying employers to furlough qualifying employees in line with the CJRS and reclaim part of the wage costs of furloughed employees up to a cap.

The UK Government has been under pressure to extend the CJRS or replace it with a comparable scheme to protect jobs.

Several issues relating to the Job Support Scheme remain to be clarified. The Government has produced a factsheet on the scheme, which can be found at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/921389/Job_Support_Scheme_Factsheet.pdf. It has promised that further guidance on the Job Support Scheme will be published shortly.

What is the Job Support Scheme?

The Job Support Scheme is designed to protect viable jobs in eligible businesses, which are facing lower demand over the winter months due to the coronavirus pandemic. It aims to help employers to keep their employees attached to the workforce. The scheme will commence on 1st November 2020. It is currently scheduled to run for 6 months until 30th April 2020.

How will the Job Support Scheme work?

The employer will continue to pay its employee for the time worked by the employee. However, the cost of the hours not worked by the employee will be split into 3 parts between the employer, the Government (through wage support) and the employee (through a wage reduction). The employee will keep his/her job.

How much will the Government pay under the Job Support Scheme?

The Government will pay a third of the hours not worked by the employee up to a cap of £697.92 per month.

How much will the Employer pay under the Job Support Scheme?

This is not yet entirely clear.

It is clear that the employer will have to pay the employee for the hours which the employee is required to work.

It seems likely that the employer’s contribution of a third of the cost of the hours not worked by the employee will not be capped in a similar way to the Government’s contribution. This is because the Government’s factsheet makes a specific reference to the latter but makes no reference to a cap on the employer’s contribution. However, this remains to be clarified.

Need to talk? 

Whatever stage you or your business has reached, we can help you to understand the different legal and related issues arising from the coronavirus outbreak so that you can choose the option that is right for you and/or your business.

Contact us

If you would like more information about the Job Support Scheme or the other measures taken by the UK Government in relation to the coronavirus outbreak  or would like to discuss a potential or existing issue, please contact us by telephone on +44 (0)20 3126 4520 or +45 38 88 16 00 or by email at enquiries@orrlitchfield.com

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full Legal Notices on our website.

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