On Wednesday, Economic Development Minister Lyndon Farnham announced that the worst-hit firms would no longer have to pay 20% of their staff’s wages, up to a maximum of £1,600 per month, as part of the co-funding agreement.
Previously under its payroll support scheme, the government was covering 80% of staff wages, up to £1,600 per employee per month, with the business paying the remaining share.
But concerns were raised that many companies would not be able to pay their 20% because their revenues had reduced so much. Firms also had to confirm a drop of at least 30% in their turnover to qualify for the support.
The latest update to the scheme aims to ensure that businesses, including charities and self-employed people, disrupted by Covid-19 have access to funds.
It is estimated that it will cost £138 million over three months and will support around 27,000 employees.
Simon Soar, president of the Jersey Hospitality Association, welcomed the development and said that it should help the smallest businesses to get through the crisis.
‘I am really happy to see this happen and it is going to address some of our concerns. This is going to bring people out on the other side of this and that is what we want to see,’ he said.
‘This is especially for the small and medium businesses who don’t have a cashflow or a big amount of savings at this time and can’t afford the 20%.
‘There are some firms who may say that they don’t wish to pay the 20% of staff wages either. But I think they may not understand what these guys are going though and, as a community, we need to appreciate that.’
Dominic Jones, executive director of Jersey Potteries, also welcomed the move but said he felt Jersey’s scheme was complex compared to that launched in the UK.
‘It’s obviously positive news for many businesses in the Island that the challenge of co-funding has been taken away and is no longer mandatory,’ he said
‘But I would still question whether the scheme is simple enough and clear enough to achieve the optimal stimulus to support both businesses and employees that is required.
‘There are many aspects of the UK schemes which are simpler and that are enabling businesses to make decisions more quickly.’
Mr Jones also called for statistics on the economy to be published regularly by the government, including information on the number of redundancies and claims made under the government support schemes.
Employers and self-employed people will be able to apply for funding using an online form which will be available from 1 May.
