The original Job Support Scheme (JSS) announced by the Chancellor in September has been replaced by something considerably more useful to employers. This is in response to objections from businesses in tier 2 areas in particular, who were facing drastically reduced demand but less support from the government than tier 3 businesses legally required to close. This revised version is called the short-term working, or Job Support Scheme ‘Open’.
The main source of information is the Job Support Scheme Factsheet, which will be updated with more information and sample calculations in the days ahead.
The Chancellor had also announced an expansion to the Job Support Scheme on 9th October, to provide temporary support to businesses in tier 3 areas whose premises have been legally required to close due to the tighter tier 3 restrictions. This is now called the Job Support Scheme ‘Closed’. Details of the JSS ‘Closed’ remain unchanged. Both Open and Closed parts of the JSS are explained here. Where we refer simply to the Job Support Scheme, this means both Open and Closed parts.
The JSS starts from 1 November 2020, immediately after the Coronavirus Job Retention Scheme (CJRS) finishes. It is by no mans a successor to the CJRS, and there are important differences you need to be aware of, also explained below.
Job Support Scheme ‘Open’
- An employee will now only need to work and be paid for a minimum of 20% of their normal hours, not 33% as originally announced. A lower threshold and much easier percentage to work with all round.
- The employee will receive up to 61.67% of their normal pay, for the hours not worked, which will be paid by the Government, up to a cap of £1,541.75 per month (up from £697.92 a month as originally announced).
- The employer will contribute the other 5% of the unworked hours (capped at £125 per month), not 33% as originally announced.
Businesses will have to pay all employer national insurance contributions and statutory pension contributions.
Job Support Scheme ‘Closed’
- Under the Closed Job Support Scheme, businesses who have been required to close due to Covid-19 restrictions will receive grants towards the wages of employees who cease work.
- This will cover business that are legally required to close their premises, or to provide only delivery and collection services from their premises.
- The Government will pay two thirds of employees’ usual wages, up to a cap of £2,100 per month. You will not be required to contribute towards wages, but do need to cover employer National Insurance and pension contributions.
Search ‘Job Support Scheme expanded to firms required to close due to Covid Restrictions‘ for more on the Job Support Scheme ‘Closed”.
Eligibility for the JSS
The Job Support Scheme is open to most employers and an employee does not need to have been previously furloughed in order to benefit. Larger employers (with 250 or more employees) are only eligible if their turnover has fallen during the pandemic.
Employers must agree the new short time working arrangements with their staff, make any changes to the employment contract by agreement and notify the employee in writing. This agreement must be available to HMRC upon request.
To be eligible for the JSS, employees must:
- be registered on the PAYE payroll on or before 23rd September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020.
- work at least 20% of their usual hours, and they can undertake training in their working hours whilst being claimed for.
- staff on any type of contract are eligible, including those on variable or zero hours and agency workers.
Employees can be in the Job Support Scheme for as short a period as 7 days or longer. They do not have to be working the same pattern each month.
Importantly, employees cannot be made redundant or put on notice of redundancy while in the JSS.
The JSS runs for 6 months from 1 November 2020. The first JSS claims may be made by Employers online through gov.uk from 8th December 2020. Claims will be paid on a monthly basis.
HMRC will tell employees the amount of the Government grant paid for them.
The Government expects that employers do not top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense. This is different to the CJRS where employers have sometimes paid more than their contribution to give employees more than 80% of their wages overall.
The JSS will operate in addition to the Job Retention Bonus (JRB). The JRB pays businesses £1,000 per employee who has been furloughed and remains employed at 31 January 2021. Both schemes can be used and claimed for the same worker(s).
Comparing the JSS and the CJRS
Recent data from HMRC indicates that around 3m workers are still on furlough under CJRS (about 12% of the workforce).
Only about 20% of furloughed workers are on the flexible furlough scheme option introduced in July.
This may be because it is more complex to calculate claims for the flexible furlough scheme and therefore the JSS may have a similar low take up.
The JSS is less generous than the CJRS. In October under the CJRS employers were paying just 20% of the workers normal wages and the worker need not work at all. Under the JSS from 1 November where an employee works a minimum of 20% of the normal hours the employer will have to pay more, 25%, of the normal wage costs.
It may be better for employers to agree with the worker just to work less hours so that it is overall cheaper for the employer and the worker would not be put into the JSS. If redundancy is the only alternative then the worker may in effect have to agree. It is still possible that just because an employer did not use the JSS the decision to select a worker for redundancy would still be a fair decision.
A reminder that the JSS will be suitable only for certain types of business, as the Government says where the jobs are viable and will be needed for the longer term.
What should employers be doing now?
- Decide by 31 October which employees will return from furlough leave and could move to the JSS.
- Decide whether any employees currently working will move into the JSS.
- Regularly review staffing requirements because staff can cycle on and off the JSS, for as little as 7 day period.
- If there is insufficient work for workers to do (less than 20% of normal hours) and therefore the JSS does not support them then employers will need to consider putting them at risk of redundancy.
- Consider how to implement the move of workers to the JSS including collective and individual consultation with staff. This consultation may be required if staff do not agree to move to the JSS and therefore redundancy has to be implemented. Employers have followed the correct procedures to protect themselves from an unfair dismissal situation. Look out for further details about the JSS when published in the coming weeks most likely by HMRC further guidance.
The information set out in this article is correct at date of publication (30th October 2020). The effect of coronavirus on businesses means things change fast, and so it is important to obtain legal advice to ensure you are properly protected.