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COVID-19 furlough scheme replacement unveiled by the Chancellor

Coronavirus (COVID-19): Government unveils new wage subsidy scheme

24/09/2020

We are fast approaching the end of the Government’s highly successful furlough scheme. The scheme, which closes at the end of October, has been pivotal in saving millions of jobs through the COVID-19 crisis and the UK’s first nationwide lockdown.

New measures announced in a bid to avoid mass redundancies

However, current ONS figures suggest that around a tenth of employees were still furloughed at the beginning of September. This equates to more than 2 million people who, if not back in full employment by the end of next month, will sadly face redundancy.

With the resurgence of the epidemic, and new coronavirus rules announced by the Prime Minister earlier this week, Chancellor Rishi Sunak has come under increasing pressure to announce further measures to protect jobs.

Today (24 September, 2020), he addressed the House of Commons to outline his plans for a new coronavirus financial platform known as the Job Support Scheme.

What you need to know

Steele Raymond’s Head of Employment, Deborah West, has summarised the main points of the scheme below:

  • In order to ensure that only ‘viable jobs’ are supported, to qualify for the new scheme employees must work at least one third of their normal hours and be paid for those hours by the employer.
  • The employer and Government will then each contribute 1/3 of employees’ usual pay for the remaining hours not worked (with the Government’s contribution being subject to a cap), so that overall employees receive up to 77% of their normal pay in return for working 1/3 of their normal hours.
  • The scheme will be targeted at employers that need it most – this will mean that while all SMEs will be eligible, larger businesses will only qualify if they can demonstrate that their businesses have been adversely affected by the Covid crisis.
  • The new scheme will start in November and continue to run for 6 months.
  • It is open to employers irrespective of whether they used the furlough scheme.

You can find out more about the Job Support Scheme by reading the Government’s own factsheet

A rapidly evolving situation

The effect of coronavirus on businesses continues to be fast-changing so it is important to obtain bespoke legal advice to ensure you are properly protected.

*The information set out in this article is correct at the date of publication (24 September, 2020). The effect of coronavirus on businesses is a fast-changing area and so it is important to obtain legal advice to ensure you are properly protected. Visit our Coronavirus (COVID-19) Hub for more Leading Insights.

Contact us

If you have any questions regarding the impact of the Coronavirus upon your business or are seeking up-to-date legal advice on employment matters, contact Deborah West on 01202 294 566 or email DeborahWest@steeleraymond.co.uk. Alternatively, contact a member of our Employment team in Bournemouth.

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