Preparing for the End of the Furlough Scheme

Preparing for the End of the Furlough Scheme

As the Coronavirus Job Retention Scheme comes to a close, we take a look at the new Job Support Scheme and what it means for business owners in practice

By Emma Williams

The UK Government's furlough scheme saw 9.6 million workers furloughed by 1.2 million employers since March. Claims since March total almost £40 billion, and it’s estimated the government will eventually spend up to £60 billion on furloughed workers.

But the furlough scheme is ending on 31st October 2002. In its place, businesses and workers get a Job Support Scheme set to run for six months starting on 1st November. Companies will receive further assistance in the form of adjusted business loans. 

It’s another set of rules for leaders and employers to absorb, so we’re going to take a quick look through the changes announced and work through what you need to know about the measures in order to prepare. We’ll also examine changes to other key schemes and some of the legal obligations facing managers and business owners when employees return to the office.

How the new Job Support Scheme works

The new Job Support Scheme will work by topping up employee wages for businesses that can’t yet get staff back to work on a full-time basis. To qualify, staff need to be in a viable role, which means they’ll have to work at least one-third of their usual hours. Measures apply to the hours they don’t work, and responsibility for pay gets split between the government and the employer, who contribute a further third each. 

Although that equates to almost 80% of the employee’s full salary, it’s where similarities with the furlough scheme end. Under the past measure, the government paid 80% of wages, even when employees worked zero hours. The most significant difference between the old scheme and new one for businesses is that companies must pay employees for the hours they work, and job support will see the state coughing up around 20% of salary totals. That figure represents around a quarter of the financial support companies received during furloughing.

Managers and business owners should also note that job support payments (government contributions) get capped at £697.92 each month. Employers will get reimbursed similarly to how they did under the furlough scheme – after work hours have been logged. Even companies that didn’t sign up for the past scheme will be eligible for job support.

Changes to business loan schemes

There’s positive news concerning the Bounce Back Loan scheme, with terms extended to 10 years, instead of the previous maximum of just six. That change is aimed at lessening the strain on companies by giving them the option of lower repayments. 

Lenders providing loans under the Coronavirus Business Interruption Scheme also get the option of offering changed terms of up to ten years. Not only that, but the deadline for loan scheme applications has been put back until the last day of November. Companies under severe financial pressure can apply to repay only the interest on their borrowing for six months. 

Your legal obligations as an employer

It's key to understand how changes to the above schemes may impact your legal obligations as an employer. Here's a quick reminder of your responsibilities if you have staff returning to the office:

1. As an employer, it’s your responsibility to put measures in place for social distancing and contact tracing. That means allowing for the one-metre rule and having one-way systems that minimize contact everywhere. In retail, special measures for dealing with returned items will ensure transmission gets prevented. That could involve the storage of products for a few days before your staff handles them. In hospitality, you’ll need to have systems for collecting customer data set up in case NHS Test and Trace come knocking later. 

2. Good practice during COVID-19 means doing risk assessments to protect workers. Failing to do so is setting yourself up for problems and blame. Risk assessments should be relevant to the current situation, your premises, and the transmission characteristics of the virus. It’s a great idea to have a risk assessment consultation process in place that involves your staff. Accepting and acting on feedback received can enhance the effectiveness of your procedures and provide peace of mind for workers.

3. Once you’ve established what the risks are, it’s time to implement a system based on that – and regularly audit to identify problems and areas for potential improvement. Promoting and providing facilities for frequent hand hygiene almost goes without saying. Continuous monitoring of practices and procedures should be combined with regular health checking measures. 

4. PPE obligations will differ depending on your line of business and the type of your premises. However, it’s vital not to think once you’ve provided PPE, your responsibilities as an employer end. Protective equipment should be high-quality and a good fit, both for workers and the work environment. Training is also essential, even in manufacturing environments where PPE is the norm. For instance, there’s a high risk of contamination when removing PPE, and that’s not a concern for production workers with no virus around. 

5. When employee concerns for safety occur, you should do anything you can do to improve the situation. Consider staggering work hours to avoid rush hour because public transport will raise fears in many workers. Again, talk with your staff and act on feedback. Looking at things from a worker perspective may help you see problems, and any future tribunal would consider events from their viewpoint. Communication is important for identifying issues before they arise and addressing them when they were unavoidable. 

6. It’s in the best interests of your business to give special consideration to vulnerable employees and apply measures if you or they feel that’s beneficial. Where necessary, adjust their responsibilities or role to allow for risks. In some instances, you may need to postpone their return to work. Remember to consider each employee based on individual concerns and circumstances.

About the Author

Emma Williams is part of the Manchester Accountants team at Accounts and Legal. Accounts & Legal can help businesses get up to date with the new Job Support Scheme, as well as helping with all aspects of forecasting, tax, and getting back on top of any financial issues caused by COVID-19. They also have a team of experienced solicitors who can help with all legal services related to employment law.