So, after accountants and employers spent a lot of time getting to grips with the first (fairly pointless) and second (somewhat more attractive) iterations of the proposed Job Support Scheme, it's been scrapped. Instead, the existing Job Retention Scheme has been extended until at least March. The scheme mostly continues as before, but since it's designed to admit new starters who didn't qualify first time around, there are some quirks. Some people will do well, others badly.
- Anyone who was on the payroll back when the scheme first came into play has their furlough pay entitlement worked out on the same basis - by looking back to their 2019-20 pay. That means that if they've had a pay rise or started to work more hours in 2020-21 and now get furloughed, they lose out. Their entitlement will be based on their old, lower pay.
- However, it also works the other way round - if their hours have been decreased in 2020-21, their furlough pay will still be based upon their old, higher pay. Lucky them.
- You might have two people doing the exact same job, at the exact same pay rate. But if one of them started during 2020-21, whilst the other was on the books back in 2019-20, they could have different entitlements to furlough pay. The newer starter's will be based on their September 2020 salary (if they're on a fixed salary). The longer-standing employee's will be based on their pay back in February. If they've had a pay rise since then, they lose out - it's not going to be reflected in their furlough pay. And you could have an employee on variable hours who averaged 30 hours a week in 2019-20, and a colleague who averaged 10 hours a week. In 2020-21, they might be averaging 20 hours a week each - but the first employee is entitled to three times as much furlough pay as the second.
- In the first phase of the scheme, an employee had to be furloughed for at least a solid three-week period in order to be eligible for the scheme. That requirement has gone now, so employers experiencing some COVID-related decline in demand, but not enough to send anyone home for weeks at a time, will be able to get a bit of support previously unavailable to them.
- A lot of company directors missed out on furlough pay last time round, on the technicality that their payroll was filed annually, at year-end, so missed the cut-off date for the scheme (none of those directors were clients of this firm - we've always filed director payrolls on a monthly basis). This time round, they're in.
Despite the oddities of the rules, some employers will choose to top the pay up of those employees who lose out because of the new scheme. This is not something all employers will be able to do though, and in all of these schemes there will be unavoidable unfairness.
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