Oct 2020

5 (hidden) pitfalls of the Updated Job Support Scheme

Before leaping into the pitfalls of the updated Job Support Scheme (and why your clients will lose out), I am going to clear up some of the confusion about what it is.

Note: The start of a second England-wide lockdown has prompted the Government to extend the existing furlough scheme until December – pushing back the start date for the Job Support Scheme. Latest update on the return of the original furlough scheme.

Explained: The Updated Job Support Scheme Rules

An overhaul of the scheme rules was announced on 22 October, making the scheme much more attractive to employers across the UK.

The scheme has been adjusted to reduce the employer contribution for the employees unworked hours from 33% to just 5%.
The minimum hours required for employees to work was also lowered from 33% to 20%, so those working just one day a week will be eligible.

Although these updated scheme rules make much more sense for employers trying to save their business in these trying times, there are still a number of shortfalls to the scheme that you need to be aware of to ensure you give your clients the best advice. Many businesses need to decide whether to avail of the Job Support Scheme or face the possibility of employee redundancies.

The 5 (hidden) pitfalls of the Updated Job Support Scheme

The scheme is not open to businesses over 250 employees unless they can prove their turnover has fallen due to COVID-19.
The employee must work at least 20% of their usual hours and the employees must be paid their normal contracted wage for the time worked. Although this threshold has dropped from 33% to 20%, the Government have said that they will still review this after 3 months to decide whether to increase this minimum hour's threshold.
Short-time working arrangements must cover a minimum period of seven days. However, employees will be able to rotate on and off the scheme and they do not have to be working the same pattern each month.
Increase in admin - Employers must agree to the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing.
Employers will be paid on a monthly basis and grants can only be used as reimbursement for wage costs actually incurred.

Sadly, it does not appear that the Job Support Scheme will avoid arise of redundancies over the coming months as employers seek to manage their cashflows to survive the winter months. Join our latest webinar to find out more about the New Job Support Scheme and whether it’s right for your clients. These webinars are incredibly popular, and our COVID-19 series has achieved 99.4% customer satisfaction, so register now to secure your place.

Webinar: New Job Support Scheme Explained
18th November – 10.30am

In this webinar, we look at what you need to know about the new and updated Job Support Scheme, including which employees are eligible, why your clients will lose out, the level of government funding, and how the scheme is actioned through payroll. Whether you use BrightPay or not to run your payroll you are more than welcome to join. We will also explore the rise in redundancies and the new changes regarding statutory redundancy and notice pay for furloughed employees. Register now.

What you'll learn: