HR update – Guidance on the new Job Support Scheme

As you may have heard today, the chancellor, Rishi Sunak, has announced a replacement for the coronavirus job retention scheme based on a German-style system of wage subsidies which will require employers to give staff a minimum of 33% of their usual hours, with the government covering some of the wages for the remaining hours not worked. Whilst little is known about this scheme, an employer’s guide is attached covering the key points we know so far.

Faced with the prospect of rising job losses this autumn when the furlough scheme closes at the end of October, and tougher restrictions on the economy as the pandemic worsens, the “job support scheme” forms the backbone of his winter economy plan. Although this scheme is welcomed, it’s less generous than the furlough scheme as employers will have to pay more than before, and employees will have to be working plus it’s aimed only at those jobs that are viable.

Businesses in need of this support will now have to undertake a thorough review of where, if possible, to reduce hours, and whether they can balance necessary productivity with reducing hours. Temporary contracts will also need to be agreed when hours are reduced, to ensure employees are clear on their new way of working.

Many businesses will breathe a sigh of relief at the cashflow support the Chancellor offered, especially the VAT and loan repayment deferrals. The extension of support for the self-employed is another a key step. The lack of support for small owner-operating Directors of businesses remains a gap in the structure of government support and hopefully the Chancellor will address this as it is key to the recovery of SME’s.

On a positive note, although on one hand, we’re currently supporting a number of clients with redundancies in the hospitality and leisure sector, it’s encouraging to see other sectors such as property, legal and digital marketing thriving and growing their team.

Until next time, have a great week and if you have any questions or if you need advice, I’d love to hear from you.

*This publication is a general summary of the employment law and is up to date at the time of publishing. It should not replace advice tailored to your specific circumstances.