Following the initial COVID-19 outbreak and introduction of government furlough schemes, it’s been announced that a further Job Support Scheme (CJRS v3.0?) will begin from November and offers employers the opportunity to gain funding for employees moving to shorter working hours to support viable jobs.
The Flexible Furlough Scheme, an extension and medication of the Coronavirus Job Retention Scheme (CJRS v1.0), is due to end on 31st October and already gives the opportunity for employers to bring their teams back part-time. In its last month of October, employers are asked to provide 60% towards wages with the government making up the remaining 20%, with exception to employers’ national insurance and minimum pension contributions.
Designed to ‘protect viable jobs’, the new scheme will run for 6 months and begin on 1st November 2020. The employer will be required to give a minimum of 33% of hours to employees, with the remaining amount being split between the employer, government and individual.
To be eligible for the scheme you must:
- Have a UK bank account and UK PAYE Scheme, however you do not need to have already claimed on either of the first two Coronavirus Job Retention or Flexible Furlough Schemes.
- Be a small or medium enterprise (SME), however larger businesses could be eligible if they meet financial assessment tests
- If eligible, larger businesses are expected not to make capital distributions such as dividends or share buybacks whilst accessing the grant.
Your employees must also be:
- On your payroll on or before 23rd September, being notified to HMRC via RTI
- Working a minimum of 33% of usual hours for the first 3 months, likely to be increased in the remaining months but will be confirmed nearer the time
- Complete a minimum period of 7 days on their short-time working agreement
The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
For ease of reference, we have included the governments examples below exactly how they appear in the guidance. As more examples are worked on by our teams, we’ll continue to publish them too.
Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).
- Her employer pays Beth £140 for the days she works.
- And for the time she is not working (3 days or 60%, worth £210), she will also earn 2/3, or £140, bringing her total earnings to £280, 80% of her normal wage.
- The Government will give a grant worth £70 (1/3 of hours not worked, equivalent to 20% of her normal wages) to Beth’s employer to support them in keeping Beth’s job
The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer. The government contribution will be capped at £697.92 a month.
“Usual Hours” will likely be calculated as in previous schemes, comparing to the same period in the previous year or average across the prior financial year for varied workers.
|Hours Employee Worked||33%||40%||50%||60%||70%|
|Hours Employee Not Working||67%||60%||50%||40%||30%|
Employee Earnings (% of normal)
Gov’t Grant (% of normal wages)
|Employer Cost (% normal wages)||55%||60%||67%||73%||80%|
Important Next Steps that MUST be taken
- Short-Time Working Agreements must be in place and in writing
- Records must be kept for HMRC inspection and money returned if found to be incorrect
Talk Staff’s HR Support & Advice Services are available for any employers looking to write Short-Time Working Agreements or considering redundancies across their businesses.