2020 Job Support Scheme in the UK Explained: What to Expect from the New Furlough Scheme
The spread and severity of COVID-19 pose the threat of lower demand to many businesses, particularly in the coming winter months. To support those affected, the UK government and employers are enforcing a Job Support Scheme. This effort protects jobs and supports employees financially throughout the negative impacts accompanying the pandemic. A plan like this can compensate for employees’ lost hours that typically coincide with a business’ lower demand.
Furlough, which has previously been aiding employees across the United Kingdom through the Coronavirus Job Retention Scheme, is coming to a close by the end of October. In place of that, a new Job Support Scheme will be implemented in the UK that will stretch over the course of six months, starting as soon as the 1st of November 2020. From there, employers will continue to compensate their workers as usual for hours worked. As long as they work for at least a third of their usual hours (33%), the remainder of hours not worked will be paid by both their employer and the government. The usual hours and wages, for the purpose of these guidelines, remain similar to the methodology used in the Job Retention Scheme prior - where the usual hours and wages are underlying and based on what was worked pre-furlough. Refined guidelines on usual hours and wages have not yet been released.
A factsheet of the grant has been released, outlining coverage, eligibility, and how to claim, but for lingering questions, keep reading!
When Does the Job Support Scheme End?
The new Job Support Scheme in the UK is designed to incur the projected impact that the opening of the economy in the coming winter months could have in kind with the coronavirus’s significance on struggling businesses. This implementation will run for six months, starting November 2020 and lasting until April 2021.
How Is It Calculated?
Eligible employees that work at least 33% of their usual hours will be paid their usual contracted wages for the hours worked. Any hours not worked will be paid in part by the employer and the government. While the government’s contribution is to be capped at £697.92 per month, in situations where the cap has not been reached, employees will earn a minimum of 77% of their usual compensation. All of this can be hard to imagine, making visual aids like this Job Support Scheme calculator pretty helpful when trying to understand the scheme’s specifics.
To put this into perspective, an employee that would typically make £2,000 from working their usual hours, but has cut back to working half of that, would still be compensated £1,000 for the hours worked (equating to 50% of a working day’s compensation). In addition to that, their employer would also pay £333 (bringing their earned pay to 67% of a working day’s compensation) for the hours not worked, and the employee would receive another £333 from the government (bringing their earned pay to 83% of a working day’s compensation).
How Could Someone Check the Amount of Payout From the Job Support Scheme?
Different numbers and figures can be plugged into the Job Support Scheme calculator for an estimate on the payout that will be granted. Her Majesty’s Revenue and Customs will also check claims for accuracy and fraudulence. It is intended that Her Majesty’s Revenue and Customs will be communicative with employees regarding the full details of claims made.
When Is the Payout and How Does One Make a Claim?
Eligible employers may start making claims in December 2020, just a short time after the startup of the Job Support Scheme, through Gov.uk, and compensation will occur monthly. In a given pay period, once the employee has been paid, the employer would then report the payment to Her Majesty’s Revenue and Customs and receive a return for the funds.
The new Job Support Scheme is designed for small- and medium-sized enterprises and considers all employers eligible, though larger businesses may have to prove the pandemic’s impact on them has been significant before they can claim anything. Regardless, no previous use of the Coronavirus Job Retention Scheme is required for the implementation of the new plan. Additionally, if employers are eligible and utilizing the Job Support Scheme, they will also benefit from the Job Retention Bonus as both are intended to function alongside one another. This means that the employer may receive a Job Retention Bonus of £1,000 for every employee who remains employed through the end of January 2020 and was previously claimed under the Coronavirus Job Retention Scheme.
For employees, they must have been on the employer’s payroll on or before the 23rd of September 2020. Employees who work at least a third of their usual working hours during the period of implementation for the scheme are eligible so long as there is no preexisting notice of redundancy. Just as for the employer’s qualifications, no previous use of the Coronavirus Job Retention Scheme is required for the new plan being implemented. While a third of their usual working hours is the threshold for employee eligibility now, the number is to be revisited after three months to determine if it needs to be adjusted.
What Does the Job Support Scheme Look Like for Retrenchment, Foreign Workers, Self-Employed Individuals, and Work Permits?
The Job Support Scheme aims to prevent or deter retrenchments that stem from the pandemic’s effect on small- and medium-sized enterprises (SMEs). Larger businesses will also be aided if they can prove they are significantly affected through the completion of a financial impact test—which SMEs do not need to participate in. Further guidance and information on the Job Support Scheme are pending. However, we can take a look at the classification criteria of SMEs from the Companies Act 2006:
Their annual turnover will be less or equal to £36 million;
The balance sheet total is less than or equal to £18 million; or
They have 250 or fewer employees.
Beyond that, the eligibility requirements do not outright exclude foreign workers, self-employed individuals, or those working under a permit at this time.
Job Support Scheme in your HRIS
How Lanteria helps UK customers in getting all set with job support scheme automation
Basically, all you need is to set the rules for UK employees once and let the routine be done automatically by your system (HRIS/HRMS/HCM).
But in case you already have a number of back-office systems, one more routine is occurring - integration.
Researchers say, 75% of companies with over 100 employees have more than 3 HR software solutions in their toolkit. Usually, it’s payroll, HRIS, ATS, PTO management system, and other HR software - much more than 3 systems if you count.
Data accuracy. Transferring data between software demand a lot of manual work, that usually leads to mistakes. And even a 1% chance for mistakes is not something you’re happy with.
Extra costs. Manual work has its price.
Efficiency. Human Resources professionals are overwhelmed with moving Excel or CSV reports between the systems. This is a huge waste of the HR manager’s time that could be utilized on people management tasks.
This is why Lanteria’s approach is to:
Provide the customer with an all-in-one HR solution.
Let the robot do his job and HR managers save their precious time.
Customize everything that makes your company unique. Lanteria HR is a Lego you can buy and make us construct it the way you need it. That’s how we differ from in-box solutions - Lanteria HR evolves with your company.
What are the companies that buy Lanteria HR solutions? They love:
100% accuracy in people’s data.
100% absence of manual routines.
A Microsoft-friendly solution that easily talks to any other MS business application like Office 365, MS Exchange, and more.
Simple integration with the payroll system they use. We don’t force customers to switch their payroll solution to another one - we adapt Lanteria HR instead.
Here are some customers you might know: SEGA, Acronis, US Postal Service, OSM, Warner Bros. (learn more about the HRMS implementation case studies, customer success stories, and industry HR automation solutions).
Let’s go back to the Job Support Scheme. 3 things you should know about the Lanteria HR Platform:
Its robust Time & Attendance (T&A) module is designed to automate and simplify employee time tracking, absence management, and setting up leave policies and rules even for offices located in different countries.
Lanteria HR streamlines the data transfer to any payroll system you prefer.
The killer feature Lanteria’s worldwide customers love is the customization. Whatever happens to the government regulations we can tune your HCM system the way you need it!
PS: Many thanks to a bright HR star Kelly Tucker for a short and clear video explanation!
Follow Kelly on LinkedIn: https://www.linkedin.com/in/kelly-tucker-95a8a416/
Get a consultancy from HR Star: https://www.hr-star.co.uk/