Change! Change! Change!

Claire Vane
November 6, 2020

The new Job Support Scheme was to start from 1st November, but the Government have announced that the existing furlough scheme, that was to end, is to be extended.  Therefore, the Job Support Scheme is now delayed.  I will issue the bulletin drafted on the Job Support Scheme later when it is on the cards again or about to be brought into force.  In the meantime, I will focus on the extension of the furlough scheme.

In essence, the extended furlough scheme will continue until the end of March.  We do not know the exact date yet.  This means that the Government will pay up to 80% of employees’ normal pay, capped at £2500.  Employers will continue to be responsible for National Insurance and pension contributions.

The scheme known as ‘Flexi-furlough’ will also continue to be an option.  This enables employees to work part time and receive a furlough grant for unworked hours.  

It is important to know that the Government has broadened the furlough scheme so that in order to be eligible an employee must simply have been on an employer’s PAYE payroll before midnight on 30th October 2020.  

If employers have already issued JSS open agreements, it is important to contact those employees who are affected as soon as possible to explain that the Government has made a last-minute decision to extend the furlough scheme and to ask them to agree to continue on furlough instead.  It would be advisable to have a clear written audit trail of everything.  

The thinking behind this change and to delay the JSS scheme and extend the furlough scheme is along the lines below:

  1. There is no point in having two schemes running simultaneously.

  2. It was thought that the existing scheme was in the final stages of being wound down to a natural close with the Government contribution reducing as the employer contribution has been increasing. However, the extended furlough scheme will put the clock back to the situation in which we found ourselves in August, that is, the Government contribution is 80% wages/salary up to a cap of £2500.

  3. With flexi-furlough, as above.

Just to put this into context: the Job Support Scheme  (JSS) was to be divided into two parts – an open scheme for business operating where employees are working at least 20% of their usual hours and the JSS Closed Scheme where the business is legally required to close premises and the employees have no work at all.  Under the latter, the Government was to pay 60% of employee wages/salary up to a maximum of £2083.33 a month.  The position was more complicated under the JSS Open Scheme, but the Government contribution was capped at a maximum of £1541.75 per month with the employer contribution being capped at £125 per month.

In summary, the extended furlough scheme – the latest decision – is more generous than both the JSS Open and JSS Close Schemes.  

The qualifying date of 30th October will be very welcome for those employees who have never qualified for furlough but who would have been eligible for the JSS Scheme.  This includes recent starters and employees who carried on working through the pandemic and did not stop work for 3 consecutive weeks before 1st July which was a pre-condition of eligibility for the furlough scheme after July.

If you would like help with wording any documents, please do get in touch.

We already have drafted a series of different options to communicate with employees if there is already a JSS agreement in place.  For where there is no JSS agreement in place and where there is no JSS agreement in place and employees have not been on furlough.  Please do get in touch if you’d like help with this.

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Claire Vane

Claire is the Managing Director and Founder of Integrated Resources. She is passionate about releasing potential in individuals and organisations.

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