Firms will miss out on Job Support Scheme due to local lockdown rules

19th Oct 2020
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Following the news lately is exhausting. It’s like watching a game of tennis without an umpire - back and forth, back and forth and nobody knows the rules or seems to have any control. The last week has been dominated by the preparation of local lockdown rules all over the country;  Tier based systems that decide the fate of the areas they are assigned to. 

The announcement made on 31st October in line with the second lockdown means that businesses can receive grants covering 80% of wages throughout November and the JSS implementation has been delayed to 1st December. The employer must pay for all the employer’s NIC and employer’s minimum workplace pension contributions on those wages and the grant will be for time not worked, up to £2,500 per month. Find out more of the re-instated furlough scheme.

Tier 1 (medium) is effective nationwide already and includes the “rule of 6” and 10pm curfew. Tier 2 (high) has all of Tier 1’s restrictions but also bans people from different households mixing indoors. 

Tier 3 (very high) sees businesses such as pubs, restaurants and leisure centres closing and a ban on social contact with anyone outside your household, regardless of the setting. But these new rules will mean that many firms and employers will miss out on both the new job retention scheme and the job support programme

Recently, Chancellor Rishi Sunak, who has been scratched off my Christmas card list, outlined an extension to the job retention scheme that was initially announced earlier this month. The extension basically made sure that businesses who were forced to shut their doors due to coronavirus restrictions, would be covered under the scheme.

Under the scheme, the government announced they would pay a third of employees’ wages and the employer would have to pay another third, ensuring that employees received at least 67% of their normal wages. But for those businesses who have to shut completely, the government will pay two thirds, up to a maximum of £2,100 or employee per month, and employers would not be required to contribute any wages but will have to pay national insurance and pension contributions where applicable. 

That seems fair right? Seems like a good plan, right? Well, no. Unless you hadn’t spotted already, this leeway is only applicable to businesses that are forced to close. But what about the huge amount of businesses that won’t be required to close, but will be so adversely affected by the local lockdown restrictions that they will see their demand evaporate and trade come to a standstill? How are they expected to pay a third of their wages if they have no income? These businesses are literally falling through the cracks and there's nothing there to catch them. 

People are also annoyed that the extension of the furlough scheme was only announced a couple of weeks before it was due to end. Many businesses would have already made arrangements and put measures into place to try and avoid catastrophe and this will have cost numerous jobs already and just leads to confusion and mounting uncertainty about what exactly is going on and who exactly is covered still. 

Put simply, not enough is being done to support jobs, no matter how much this government is desperately trying to make it seem otherwise. When is enough enough? How bad does it have to get? Watch this space as I’m sure we will find out.

To learn about how these changes impact your clients and the processing of payroll, don’t miss our latest webinar. In response to COVID-19 we have already run over 30 webinars and received a customer satisfaction rating of 99.4%.

Webinar: New Job Support Scheme Explained

18th November – 10.30am 

In this webinar, we look at what you need to know about the new Job Support Scheme, including which employees are eligible, the level of government funding, and how the scheme is actioned through payroll. We will also explore the rise in redundancies and the new changes regarding statutory redundancy and notice pay for furloughed employees. Register now. 

What you'll learn: 

  • Everything you need to know about the Job Support Scheme
  • Which employers and employees are eligible
  • How to operate the Job Support Scheme
  • How BrightPay’s Job Support Scheme Calculator & Claim Report works
  • How to calculate notice pay and redundancy pay for furloughed employees
  • How to keep in touch with employees on reduced hours

Register Now.

Aoibheann ByrneWritten by Aoibheann Byrne
BrightPay Payroll Software

 

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