This is open across the UK to all SMEs. It will also be open to any large businesses who can demonstrate their turnover has fallen as a result of Covid-19. This will be available for employees working at least 33% of their usual hours. Employers will continue to pay the wages for the hours that the employee works. The employee will also receive 2/3s of their usual pay for the hours they do not work. Of this amount, the Government will fund 1/3 and the Employer must fund another 1/3. The employer will be reimbursed in arrears for the Government contribution. The Government contribution will be capped at £697.92 per month. This means that those earning up to approx. £38,000 a year will not be affected by the cap on Government contributions.
Scenario 1 (figures rounded, and subject to the Government cap):
- an employee has their hours reduced to 33% of their usual hours
- The employer pays the wages for this 33%, plus 1/3 wages of the remaining 66% of usual hours (22% of their total usual wage). This means the total employer contribution is 55% of an employee's usual wage if they are working 33% of their usual hours.
- The Government will pay 1/3 wages for the remaining 66% of usual hours (22% of their total usual wage). This means the total Government contribution is 22% of an employee's usual wage if they are working 33% of their usual hours.
- For the employee, they will therefore work 33% of their usual hours and receive 77% of their usual pay.
Scenario 2 (figures rounded, and subject to the Government cap):
- an employee has their hours reduced to 66% of their usual hours
- The employer pays the wages for this 66%, plus 1/3 wages of the remaining 33% of usual hours (11% of their total usual wage). This means the total employer contribution is 77% of an employee's usual wage if they are working 66% of their usual hours.
- The Government will pay 1/3 wages for the remaining 33% of usual hours (11% of their total usual wage). This means the total Government contribution is 11% of an employee's usual wage if they are working 66% of their usual hours.
- For the employee, they will therefore work 66% of their usual hours and receive 88% of their usual pay.
The Government document, which also details other measures announced, such as those for self-employed workers, can be accessed here.
