The Government has been under increasing pressure to extend the Coronavirus Job Retention Scheme which will cease providing support to employers at the end of October 2020. With infection rates of Covid-19 on the rise and anticipation of continued disruption to the economy, the Chancellor has outlined new measures to support employers in the form of the Job Support Scheme (“the scheme”). There are two strands to the scheme. The first strand is intended to support organisations by topping up the salaries of employees who work reduced hours due to Covid-19. The second strand operates in a similar way to the furlough scheme, under which the Government will pay two thirds of the wages of employees in businesses that cease trading due to local or national lockdowns.
Schools where staff work reduced hours
The first strand of the scheme, which tops up the wages of employees working reduced hours, is available to all small and medium sized employers. Large employers may also be eligible, subject to a financial assessment showing that their turnover has fallen during the pandemic. The Government has not yet announced what the criteria will be for an organisation to be considered a small or medium sized employer, or exactly what the financial assessment for large employers will entail. However, it is likely that many schools could be eligible for the scheme, especially if they have been forced to reduce fees or if they have witnessed a decline in pupil numbers as a result of the pandemic. Importantly, the scheme may be used by a school in relation to employees who had not been furloughed, provided they were employed by the school on or before 23 September 2020.
In order for an employee to be eligible, the employee must work at least one third of their normal hours. The school must pay the employee in full for the hours worked. The Government and the school will then each pay a third of the hours not worked, and the remaining one third of unworked hours will be unpaid. The Government’s contribution will be subject to a monthly cap of £697.92. This means that an employee stands to receive at least 77% of their normal pay, provided the Government’s contribution is not caught by the cap.
Schools will be free to bring employees “on and off” the scheme as required, however each short-time working arrangement must last for at least seven days. There will be no requirement for employees who are on the scheme to work the same pattern every month.
The scheme will be available for 6 months from 1 November 2020 and may be used by schools which avail themselves of the Job Retention Bonus. Further details of the scheme are expected to be announced in the coming days. Schools that wish to take advantage of the scheme from 1 November will need to act quickly. As soon as further details of the scheme are made available, we will be happy to advise schools on their eligibility for the scheme and how to go about implementing the new short-time working arrangements for staff.
Schools that are required to close
On Friday the Chancellor announced an extension of the scheme for organisations that are required to close, either due to local or national lockdowns. This extension will not be available where the closure is due to a Covid-19 outbreak at the organisation.
Under this extension, the Government would cover two thirds of an employee’s salary (up to a monthly cap of £2,100 per employee per month), where the employee is unable to work for seven consecutive days due to the closure. Employers would only need to cover the cost of the National Insurance contributions and the pension contributions. As with the furlough scheme, affected employees would need to cease all work, whether paid or unpaid.
This extension to the scheme may be used by an organisation that did not make use of the furlough scheme. It will be available for 6 months from 1 November and can be used in conjunction with the Job Retention Bonus.
Importantly, the Government has stated that it will be publishing a list of all organisations that make use of the extension, so schools will need to factor into their decision-making the impact of it being publicly known that they are claiming for their employees’ salaries during a period of closure.
In the event that any school is required to close, please contact one of our experts and we will advise you on your options and assist you in implementing any necessary changes to employees’ employment contracts.