Employment Law Update – Local Lockdown Jobs Support Scheme
Monday 12th October 2020
Help for businesses forced to close during ‘local lockdowns’ has been announced – what will it involve?
In an announcement posted to his Twitter page on Friday, the Chancellor has announced new help for businesses in England that are legally required to close during a local lockdown. Businesses who are not legally required to close are not eligible, although they may be eligible for support under the main Jobs Support Scheme.
For eligible businesses, the following rules will apply:
- They can pay their employees 2/3rds of their normal salary, up to £2,100 a month, and the government will cover this cost. As with the furlough scheme, it is likely employers can choose to top up employees’ salary at their own expense if they wish.
- Employers will have to pay pension and National Insurance contributions on the figure.
- Employees must have been unable to work for at least 7 days to be eligible.
- Payments to employers will start to be made in December.
- Businesses who are required to operate on a collection or delivery-only basis will also be eligible to claim in respect of employees who cannot work as a result. It is not clear whether this will apply to businesses which usually operate on this basis, but we anticipate they will only be able to claim through the Jobs Support Scheme for open businesses.
Although no guidance has been issued so far, this scheme is being touted as an expansion of the Jobs Support Scheme and hence we anticipate that employees cannot be put on notice of redundancy during a period in which the employer makes a claim for their salary.
The scheme will be open from 1 November 2020 and will run for 6 months, with a review in January. Retrospective claims for forced closures prior to 1 November cannot be made.
Similar schemes are expected to be announced in the rest of the UK.
The Chancellor also announced an enhanced business grants scheme for businesses required to close, providing a tiered monthly grant dependant on the rateable value of a business’ premises.
If you require any further information on these developments contact one of our employment law experts below.