Local Furlough Scheme announced…

Date Added 15.10.20

A new Local Furlough Scheme has been announced by the Chancellor, following on from the Prime Ministers announcement on the 12th October 2020 outlining the details of a new three tier system of restrictions which will be implemented in an effort to try and slow the spread of coronavirus across the country as we head into the winter months.

The Three Tier System

Whilst the majority of the country will initially fall under the “medium” alert level, or “tier 1”, and will therefore remain subject to the restrictions that are currently are in place (including hospitality closing at 10pm, and the Rule of Six), other areas have been categorised as tier 2 (“high”) with the Liverpool City Region designated within the “very high” alert level (“tier 3”) from the outset of the system.  The tighter restrictions under the three tier system came into force on Wednesday.

Under the tier 3 restrictions, pubs and bars must close, and may only remain open if they serve substantial meals. Local leaders in the Liverpool City Region have additionally agreed that indoor gyms, betting shops and leisure centres should also close under the restrictions.

In light of the potentially devastating restrictions this new system could cause on businesses and workers alike, Mr Sunak announced a local furlough scheme designed to support workers in businesses which are forced to close as a result of these new coronavirus restrictions.

How does the local furlough scheme work?

The new local furlough scheme, which is an expansion of the Job Support Scheme (JSS), provides that workers who are unable to work as a result of the closure of their workplace for at least seven consecutive days will be paid two thirds of their wages by the Government, up to a maximum of £2,100 a month.

This will only apply where the closure is as a direct result of the restrictions under the tiered system, and businesses will not be able to claim if they close for economic reasons or have to close due to an outbreak of coronavirus within the workplace.

Will employers need to contribute?

Under the local scheme employers are not required to contribute or top up wages of workers, but will have to cover national insurance and pension contributions. The expanded scheme differs from the original announcement in respect of the JSS under which employees must work at least 33% of their “normal hours” and employers will contribute towards some of the wages.  For more information about that, please see our article, which answers the top questions we have been asked about the JSS. The article can be read here: https://www.tollers.co.uk/new-job-support-scheme-jss-what-you-need-to-know/

How long will the scheme last?

The scheme will begin on 1 November and will be available for six months, with a review in January.

If you have a question or would like to understand the implications for your business and/or employees…Talk to Tollers on 01604 258558.  Our Employment and Commercial teams are on hand to assist you with all you need to know.


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