Job Support Scheme – Important Changes
Please note this article is up to date and accurate as of 12 pm on Friday 23 October 2020.
Yesterday Chancellor Rishi Sunak made significant changes to the Job Support Scheme (JSS) originally announced on 24 September 2020.
The JSS has now been split into two parts – JSS Open and JSS Closed. The Government have now released detail which can be found at the following link – https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme
This article to some extent follows up from my previous article on 13 October 2020 (https://gasolicitors.com/blog/job-support-scheme/) and summarises the key changes which are significant and I believe will lead to much greater take up of JSS.
As the name suggests this scheme is in place to assist employers who remain open but continue to suffer as a result of COVID-19 to retain and pay their employees. The overall objective of the scheme, as with the Coronavirus Job Retention Scheme before it, is to save as many jobs as possible from redundancy.
The JSS Open operates as follows:
- Employees must have started employment with the employer no later than 23 September 2020.
- Employees must work a minimum of 20% of the normal working hours. The employer will pay them as normal for these hours. Please note 20% is the minimum so can be increased.
- For the remaining non-worked hours (up to 80%) the employee will receive 2/3rds of pay at their normal pay (subject to a cap of their overall month earnings being £3,125).
- The Government will fund 61.67% of the non-worked hours (the capped payment will be £1,541.75).
- The employer will fund 5% of the non-worked hours.
- The employer will also have to fund the employers’ national insurance contributions and the pension contributions.
There must be a written agreement with the employees which must be retained for 5 years and can be requested by HMRC.
This scheme is in place to pay up to 2/3rds of an employee’s pay where their place of work has been legally required to close due to measures taken to tackle COVID-19.
The Government will be responsible for the payment of 2/3rds of pay but that payment is capped at £2,083.33 per month.
As with the JSS Open a written agreement must be in place with the employee which must be retained for 5 years, and can be requested by HMRC.
It may be advisable for employers, especially those in industries and sectors that are more likely to be legally shut, to have the necessary JSS Closed written agreement in place as a precautionary measure. This is so that if they are forced to close their business they can quickly enter the necessary written agreement with their employees.
Making a claim
The Government will pay grants in arrears to employers and therefore employers will need to fund wages payments in the first instance. The attached detail from the Government confirms that claims can be made from 8 December 2020.
I would advise employees and employers to read the Government’s guidance attached at the start of this article. Many of the same principles over the calculation of pay etc that were features of the Coronavirus Job Retention Scheme have been repeated but employers need to carefully understand both schemes if they are to use them and where necessary take legal and accountancy advice.
The Government’s approach to the Job Support Scheme appears to be mirroring the Coronavirus Job Retention Scheme (furlough) in that the rules and guidance develops and evolves whilst the scheme is live. My advice to all employers is to keep a close eye on the news and Gov.uk so that they remain aware of all the changes as they happen.