Jennifer Skeoch: Coronavirus job retention scheme

Jennifer Skeoch, partner in the employment team at Burness Paull, details the new measures announced by the British Government to support employers and workers during the coronavirus pandemic.

Jennifer Skeoch: Coronavirus job retention scheme

Jennifer Skeoch

A coronavirus job retention scheme has been established, for which any employer in the UK, regardless of size or sector, will be eligible. The mechanics and details of the scheme are still to be released. However, the headline terms are:

  • The aim of the scheme is to protect jobs and avoid redundancies arising as a result of the crisis.
  • Employers can contact HMRC to obtain a grant to subsidise pay for workers who are not working due to coronavirus (the definition of exactly which workers will be caught is not clear so it is hoped the guidance will help on this point).
  • The scheme is stated to cover all workers paid through PAYE (so not just employees).
  • The government will pay up to 80% of workers’ pay  (up to a maximum of £2500 a month).
  • The scheme will cover the cost of wages backdated to 1 March 2020 and for at least three months going forward.
  • There will be no limit on the amount of funding available to this scheme.
  • Payment of grants will be made within weeks and hopefully by the end of April.

These measures will go hand in hand with the earlier announcements about business loans, which will now be available for twelve months interest free (previously six months).

The government has also announced further cash flow support through the tax system, together with changes for self-employed individuals and extension of welfare benefits.

This announcement will no doubt be welcome news for all employers (particularly in the hospitality, leisure and entertainment sector given the announcement about enforced closures), but as ever the detail of the changes and in particular the guidance around the retention scheme will need be carefully considered before any promises are made to workers.

We will be analysing the details as soon as they are available and will be running a COVID-19 webinar on Wednesday 25 March 2020, to discuss these changes and the wider employment law landscape in the current crisis.

Read all of our articles relating to COVID-19 here.

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