Employment Law Update – Jobs Support Scheme Case Studies and Payments Guide
Thursday 24th September 2020
The Jobs Support Scheme announced on 24 September by Chancellor, Rishi Sunak will be effective from 1st November 2020.
In summary:
- The scheme will run for six months starting in November
- Previous use of the furlough scheme will not be a requirement
- All small and medium sized businesses will be eligible for the scheme There will be no financial assessment test for small and medium enterprises (SMEs)
- Larger business will be eligible if their turnover has fallen during the crisis
- It will apply to staff who can work at least a third of their usual hours
- Employers will pay staff for all the hours they do work
- For the hours employees can’t work, the government and the employer will each cover one third of the lost pay
- Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Full details will be set out in guidance shortly.
Case study examples
Example No 1 – half of normal hours available:
Jack normally works 40 hours a week for Rishi Ltd for £2,000 per month
Rishi Ltd currently only has 20 hours a week for Jack.
Jack is therefore paid £1,000 per month for his 20 hours a week actually worked.
He is then paid a total of £666.66 per month in respect of the 20 hours a week he doesn’t work (2/3rds) (i.e. £333.33 by Rishi Ltd another £333.33 is claimed from the government)
The missing £333.34 is what Jack has to forego to make the scheme work – unless of course, Rishi Ltd decides to make up his pay to the full rate, as many employers did under the CJRS.
So in this example Jack gets 83.3% of his full normal pay for working 50% of his normal hours of which 19.9% is paid by the government.
Example No 2 – two thirds of normal hours available:
Elaine normally works 39 hours a week for Sunak Ltd for £9,000 per month
Sunak Ltd currently only has 26 hours a week for Elaine.
Elaine is therefore paid £6,000 per month for her 26 hours a week actually worked.
She is then paid a total of £1,697.92 per month in respect of the 13 hours a week she doesn’t work (i.e. £1,000 by Sunak Ltd (1/3rd) another £697.92 (i.e. the capped amount) is claimed from the government)
The missing £1,302.08 is what Elaine has to forego to make the scheme work – unless of course, Sunak Ltd decides to make up her pay to the full rate, as many employers did under the CJRS.
In this example Elaine gets 85.5% of her normal full pay for working 66% of the hours of which 9% is paid by the government.
Example No 3 – one third of normal hours available:
Ben normally works 30 hours a week for RS Ltd for £1,500 per month. RS Ltd currently only has 10 hours a week for Ben.
Ben is therefore paid £500 per month for his 10 hours a week actually worked.
He is then paid a total of £666.66 per month in respect of the 20 hours a week he doesn’t work (i.e. £333.33 by RS Ltd (1/3rd) another £333.33 is claimed from the government)
The missing £333.33 is what Ben has to forego to make the scheme work – unless of course, RS Ltd decides to make up his pay to the full rate, as many employers did under the CJRS.
In this example Ben gets 77.7% of his normal full pay for working 1/3rd of the hours of which 28.5% is paid by the government.
Example No 4 – 20% of normal hours available:
Janine normally works 40 hours a week for Bojo Pandemic Response Ltd (BPRL) for £3,000 per month
BPRL currently only has 10 hours a week for Janine.
Janine is therefore paid £750 per month for her 10 hours a week actually worked.
No grant can be claimed as Janine is working less than 1/3rd of her normal contracted hours.
Payment Guide
| Hours Employee Worked | 33% | 40% | 50% | 60% | 70% |
| Hours Employee Not Working | 67% | 60% | 50% | 40% | 30% |
| Employee Earnings (% of normal) | 78% | 80% | 83% | 87% | 90% |
| Gov’t Grant (% of normal wages) | 22% | 20% | 17% | 13% | 10% |
| Employer Cost (% normal wages) | 55% | 60% | 67% | 73% | 80% |
For further advice contact one of our employment law specialists below.
