In what was a surprise turn of events for many (though for others an inevitable sign of what is to come), the Chancellor Rishi Sunak has once again pledged additional measures to support businesses that will be severely affected by further lockdown restrictions made in light of Covid-19.
The new measures are stated to be an “extension” to the Job Support Scheme (“JSS”), which comes into effect on 1 November 2020, and will be applicable only to those businesses that are legally required to close their doors due to Covid-19 restrictions. Such businesses will receive from the Government amounts up to two thirds of their employees’ wages, at a maximum of £2,100 per month, for the time that they are legally required to remain closed. The individual businesses must have been closed for a period of 7 days or more at a time in order to claim these amounts and the individual employees must have been off work for a period of 7 consecutive days or more in order to be covered.
Whilst these measures are being framed as an extension to the JSS, there are clear similarities to the Coronavirus Job Retention Scheme (“CJRS”) which is due to end on 31 October 2020. As with the CJRS, employers will be required to pay employers’ NI and pension contributions during periods of closure, with the Government picking up two thirds of the individual employee’s wages. Payments to employers will also be made in arrears as with the CJRS. However, further clarification around the detail of such payments will be necessary.
A key requirement for employers to make claims under this extension to the JSS is that their employees must have been on the employer’s payroll system on or before 23 September 2020. Furthermore, these initial measures are stated to last for six months, subject to a review in January, as with the JSS.
Separately, any businesses forced to close will be entitled to a non-repayable cash grant for each month they remain closed. The amounts of these grants will vary in accordance with the size of the business, from £1,300 per month up to £3,000 per month payable every two weeks. This is a larger amount and paid more frequently than the previously introduced cash grants.
Further details are yet to be released and questions remain as to whether this will apply to businesses already legally required to remain closed such as nightclubs, or whether it will only apply in respect of businesses that must be closed due to local restrictions. It is sadly to be expected that, in light of this announcement, further businesses will be legally required to close due to Covid-19, though the national or regional extent of that of course remains to be seen.
The Employment Team at Leathes Prior remain poised to answer any questions you may have on Covid-19 and its effects on your business. We have produced a bespoke Guidance Note on the JSS as a whole, which includes assistance with how to calculate what the cost to the employer would be of utilising the scheme. We also have a template letter that an employer will need to issue in order to take advantage of the JSS. If you would like to receive copies of our Guidance Note and/or template letter or otherwise require advice about the JSS, please contact our Employment Team via email or call us on 01603 610911.