Since Rishi Sunak’s original announcement there have been significant revisions to the Job Support Scheme (JSS) that commences 1st November 2020. It will run for six months and below we deal with the details currently released by the government.
The Open JSS
This applies to businesses who have not been shut down by the government and can remain open but do so with reduced levels of demand in the business and need help to avoid making employees redundant.
The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked.
This will be made up of contributions from the employer and from the government.
The employer will pay 5% of the reference / average salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish.
The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn a maximum £3,125 a month or less.
The Closed Job Support Scheme
This applies to businesses that have been forced to close under the new tiered systems implemented by any of the four governments in the UK.
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.
This will help protect employee incomes, limit unemployment and retain employer-employee matches so that these premises are able to reopen as quickly as possible when circumstances allow.
When can we claim under the JSS?
The Job Support Scheme will be open from 1 November 2020 and run for 6 months, until 30 April 2021. The government will review the terms of the scheme in January.
Employers will be able to claim in arrears from 8 December 2020, with payments made after the claim has been approved.
Who can claim?
Employers will be able to access the Job Support Scheme if:
- they have enrolled for PAYE online
- they have a UK, Channel Island or Isle of Man bank account
Qualifying employees: for both the open and closed Job Support Scheme
Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020.
This means an RTI Full Payment Submission notifying payment in respect of that employee must have been made to HMRC at some point from 6 April 2019 up to 11:59pm 23 September 2020.
Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them.
Employees do not need to have been furloughed under the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
Employers will be able to top up employee wages above the level of minimum contributions at their own expense if they wish.
Employers cannot claim both JSS Open and JSS Closed in respect of a single employee for the same day.
Employees can do training in working hours while being claimed for under the Job Support Scheme. Hours that employees spend training are paid for by the employer at their full rate of pay and will count towards 20% of their usual hours.
Who can claim JSS Closed?
In addition to the general Job Support Scheme eligibility criteria, employers are eligible to claim JSS Closed if their business premises at one or more locations has been legally required to close as a direct result of coronavirus restrictions set by one or more of the four governments of the UK. This includes premises restricted to delivery or collection only services from their premises and those restricted to provision of food and/ or drink outdoors.
Businesses premises required to close by local public health authorities as a result of specific workplace outbreaks are not eligible for this scheme.
Employers are only eligible to claim for periods during which the relevant coronavirus restrictions are in place. Employers will not be able to claim JSS Closed to cover periods after restrictions have lifted and the business premises is legally allowed to reopen. They may then be able to claim JSS Open if they are eligible.
Required: temporary working agreements
To be eligible for the grant, employers must have reached written agreement with their employee that they have been offered a temporary working agreement. The agreement must be available for view by HMRC on request.
This temporary working agreement must cover at least seven consecutive days.
Employers should discuss with their staff and make any changes to their employment contract by written agreement. When employers are making decisions, including deciding to whom they should offer reduced hours, equality and discrimination laws will apply in the usual way.
Employers must maintain records relating to the terms of the temporary working agreements for each employee, and:
- make sure that the agreement is consistent with employment, equality and discrimination laws
- keep a written record of the agreement for 5 years
- keep records of how many hours employees work and the number of usual hours they are not working
- this agreement must be made available to HMRC on request
Get ready to claim
Employers will be able make their first claim from 8 December 2020 on GOV.UK.
Employers will be able to claim from 8 December, covering salary for pay periods ending and paid in November.
Subsequent months will follow a similar pattern, with the final claims for April being made from early May. More detail about this process will be published in guidance by the end of October 2020.
Example: Average worker on furlough
- Andrew normally works 5 days a week and earns £1,400 a month, working in a restaurant in the hospitality sector.
- His company is suffering reduced sales due to coronavirus but rather than making Andrew redundant, the company puts Andrew on the Job Support Scheme, working 20% of his usual hours.
- His employer pays Andrew £280 a month for these hours.
- And for the time he is not working (80%), he will get 66.67% of his pay for that time.
- His total wage package is 73%, equal to £1,027.
- The Government will give a grant worth £691 (61.67% of hours not worked) to Andrew’s employer to support them in keeping Andrew’s job, and his employer will pay a further £56 for hours not worked (5% of wages).
- In addition, the employer will cover the Employer NICs and auto enrolment pension contribution on the payment (£56).
- His employer may also be eligible for the Job Retention Bonus worth £1,000, this would cover 94.6% of the employer’s total costs for retaining Andrew on the JSS.
As always, if you have any questions or need any help, please don't hesitate to contact us.