The Chancellor has today (Thursday 24 September) spoken to Parliament about the next stage of the Government’s plan to nurture the fragile economic recovery by protecting jobs through the difficult winter months.
He explained the main objective remains to protect people’s jobs but the way they achieve that “must evolve”.
He reiterated the message we have heard from both the PM and chief scientific advisors earlier in the week, that the virus and restrictions will be a fact of life for at least the next six months.
He said that the Coronavirus Job Retention Scheme (CJRS) was the right response at the right time but as the economy reopens, “it is fundamentally wrong to hold people in jobs which only exist inside the furlough”.
Previously the challenges arose from the fact that businesses were ordered to close. Now, most are able to open safely but they face uncertainty and reduced demand over the winter months. Sunak explained how they need support to bring people back to work and protect as many ‘viable jobs’ as possible. In order to do this, the government are launching a new Job Support Scheme.
This will enable the Government to directly support the wages of people in work – giving businesses the option of keeping employees in work on shorter hours rather than making them redundant. The scheme is built on three principles:
The scheme will run for six months, starting on 1 November 2020.
It’s important to note that the grant can not be claimed if the employee is on notice of redundancy.
To be eligible, the employee must have been on the employer’s Real Time Information submission on or before 23 September 2020.
Working patterns can vary but each short-time working arrangement must cover a minimum period of 7 days.
Usual wages will have the same meaning as that adopted under the furlough scheme.
It’s thought that the grant will not cover Class 1 employer NIC or pension contributions, but they will remain payable by the employer.
The Government has indicated that the minimum threshold of working one-third of normal working hours, will be increased in months 4 to 6 of the scheme.
Employers keeping furloughed staff can claim both the Job Support Scheme and the Job Retention Bonus.
The existing self-employed scheme will be extended on similar terms and conditions as the new Job Support Scheme.
Another major challenge is supporting businesses with cashflow problems. To meet this challenge, the Government are doing the following:
– Businesses who are struggling can choose to make interest-only payments.
– For those businesses really struggling, they can apply to suspend payments for up to six months.
– No business taking up ‘pay as you grow’ will see their credit rating affected as a result.
These are challenging times, especially for business owners and employers. Our team of HR and Employment Law experts are on hand provide you with their guidance and advice based on the latest government updates to help you work through this difficult period.
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