The finer details are not known yet, and further guidance is expected shortly, but the headlines are as follows.
- It is open to larger employers whose turnover has fallen as a consequence of COVID-19 and all SMEs (provided they have a UK bank account and UK PAYE scheme).
- It is open to employers whether or not their employees were furloughed previously.
- It is effective from 1 November, after the end of the current flexible furlough scheme on 31 October. The scheme will run for six months until the end of April 2021.
- The employee must have been on the payroll as of 23 September 2020 and work at least 33% of contracted hours of employment for which the employer pays at the normal rate. This threshold in hours may be reviewed and increased by the government after three months.
- The scheme provides help with pay for the period the employee does not carry out work for the employer – so currently a maximum of 67%.
- Of that time, the employer and the government will pay 33% of the pay that would have been available – so on the example of 67% the employer will contribute an additional 22% and the government will contribute 22%.
- The employee will receive 77% of pay in this example paid 55% by the employer and 22% by the government.
- The maximum contribution the government will make is £697.92 per month per employee and so the full benefit of the scheme is available for annual salaries up to around £38,000.
- Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
- Grant payments will be paid to employers monthly in arrears, with the expectation that employers can make the first claims online in December.
- HMRC will check claims and government grant payments may be withheld or need to be paid back if they are fraudulent or based on incorrect information.
- Employees cannot be made redundant or put on notice of redundancy during the period within which the employer is claiming the grant. However, it does not appear to be a ban on redundancies – the current information suggests employers can just stop claiming the grant and move to redundancy if they assess that is right for their business.
- Large businesses will be expected not to make capital distributions (such as dividend payments) while accessing the grant.
- The jobs retention bonus is also available to employers claiming under the job support scheme.
- Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement will need to be made available to HMRC on request so good documentation and record keeping will be essential.
See the government’s fact sheet for more information. There is a useful table at paragraph 7 showing the employer contribution and the government grant in different part-time working scenarios.
Please let us know if we can be of any help in understanding the rules, and in agreeing and implementing contractual changes with staff to take advantage of the scheme.