Changes to the Job Support Scheme for Tiers 1 and 2

Thursday 22 October 2020

This afternoon, the chancellor Rishi Sunak has announced what increased support will be available for employers and employees affected by the tiered lockdown system.

The new scheme will commence on the 1 November following the end of the Coronavirus Job Retention Scheme. The new Job Support Scheme (Scheme) (which was initially announced at the end of last month) required employees to work at least one third of their usual hours with employers paying for this.

Employees would then be paid two thirds of their salary for their remaining hours (the employer and the government would pay one third each), meaning they would see a lower take home pay of 77% of their usual salary if they work just 33% of their usual hours.

As a result of the introduction of the tiered lockdown system, many employers (particularly in the hospitality sector) located in tier 1 and 2 areas have complained that their businesses will be decimated without further government support. These businesses are allowed to open so are not eligible for the enhanced Scheme (announced by the Chancellor on 9 October 2020) that businesses required to close as a result of a lockdown can access.

Now, under the newly amended Scheme, employees of businesses in tier 1 and 2 areas are only required to work 20% of their working hours to be eligible. The contributions that employers are required to make to the hours not worked by eligible employees has also reduced to 33% from 5%.

The government will now fund 62% of wages for hours not worked up to a maximum of £1,541.75 per month. Employers will still have to pay National Insurance and pension contributions for employees working under the Scheme.

The aim of the amended Scheme is to provide more support to businesses in tier 1 and 2 lockdown areas and help them to retain employees. The Scheme will however be available to employers across the country to all business who are able to demonstrate an impact on turnover during the pandemic.

This move will no doubt be welcome by many businesses affected by tighter lockdown restrictions, but with a possible ‘circuit breaker’ national lockdown on the cards, will it be enough?

If you have any questions about the Job Support Scheme, please email or call our Employment Law team today on 0113 207 0000.