The Job Support Scheme
The Job Support Scheme (JSS) is the natural successor to furlough, in that the Government props up employers by providing contributions to wages and salaries. The main difference is that the employee must work some of their contractual hours (similar to ‘flexible’ furlough). When originally announced, the minimum amount of work that an employee must undertake was 33% of their usual hours. This has now been reduced to 20%.
Further, the Government’s contributions are rising. Previously, the Government offered to provide 33% of an employee’s pay for each hour not worked, with the employer providing a further 33%. Now, the Government will provide up to 61.67% with the employer contributing 5%. Due to this higher contribution, the Government cap for contributions has increased from £697.92 per month to £1,541.75.
Otherwise, the scheme is remaining largely unchanged. It will last for six months, ending on 30 April 2021, and is open to all employers with a UK bank account and a UK PAYE scheme. All Small and Medium-Sized Enterprises (SMEs) will be eligible; large businesses will be required to demonstrate that their business has been adversely affected by COVID-19 by undertaking a financial assessment test, and the Government expects that large employers will not be making capital distributions (such as dividends), while using the scheme. Fully publicly funded organisations are not expected to use the scheme, as has been the case with the Coronavirus Job Retention Scheme, but partially publicly funded organisations are eligible where their private revenues have been disrupted.
In order to benefit from the Government contributions, employees must have been on a company’s payroll on or before 23 September 2020, and must not be on redundancy notice. The corresponding guidance also states that employers must have agreed the temporary working arrangement for shorter hours in writing with employees (or their union, if applicable).
Businesses closed by coronavirus restrictions
But what about employers who have had to close their premises? Their employees are unable to work the 20% required to operate the scheme. For employers legally required to close, ‘JSS Closed’ is available. Under this scheme, each employee who cannot work will receive 66.67% of their normal pay, paid by their employer and fully funded by the Government, to a maximum of £2,083.33 per month. Here, the employer has discretion to ‘top up’ if they so choose.
Additional support for businesses and self-employed individuals
Some additional announcements have also been made with a view to providing much-needed support to the self-employed. Firstly, business grants of up to £2,100 a month will be made available for businesses in the hospitality, accommodation and leisure sectors which have not been forced to close but are impacted by restrictions in high-alert areas. Where areas are already subject to restrictions, the grants will be available retrospectively. The grants will be administered and distributed by local authorities, who will determine which businesses are eligible for funding.
If you are self-employed, the Government has stated that it will increase the amounts available under the next tranche of the Self Employment Income Support Scheme (SEISS). For those currently eligible for SEISS and who continue to actively trade but face reduced demand, the initial taxable grant will now be worth 40% of average monthly trading profits, up to a total of £3,750, covering the period from November 2020 to January 2021. This will be under review for the period covering February to April, so keep an eye out for future updates to determine how the scheme can assist you.
Job Retention Bonus
This remains unchanged following the most recent announcement. Under this scheme, the Government has agreed to pay £1,000 for every furloughed employee who comes back to work until at least the end of January 2021. Employers utilising the JSS can still claim this Job Retention Bonus. They are not mutually exclusive.
Key Takeaways on the Job Support Scheme
- To be eligible, employees must have been on the employer's PAYE payroll on or before 23 September 2020, the day prior to the announcement (so Real Time Information (RTI) submission notifying HMRC of payment to that employee must have been made on or before that date);
- An employee must work at least 20% of their usual hours;
- Employees will be able to "cycle on and off the scheme" and will not have to work the same pattern each month, but each short-time working arrangement must cover at least seven days.
- Employees cannot be made redundant or given notice of redundancy during the period for which their employer is claiming the grant for them.
- For time worked, employees must be paid their normal contractual wage. For time not worked, the employee will be paid up to two-thirds of their usual wage: for every hour not worked, the Government will contribute up to 61.67% (capped at £1,541.75) and the employer will pay 5% of the employee's usual hourly wage;
- Calculation of "usual wages" will follow a similar method to the Coronavirus Job Retention Scheme. Employees who have previously been furloughed will have their usual pay and/or hours used to calculate usual wages, not their furlough pay. The Government's grant will not cover Class 1 employer NIC or pension contributions, although they remain payable by the employer; and
- The grant will not cover Class 1 employer NICs or pension contributions which will remain payable by the employer. Calculation of "usual wages" will follow a similar method to the Coronavirus Job Retention Scheme. Employees who have previously been furloughed will have their usual pay and/or hours used to calculate usual wages, not their furlough pay.
- Claims can be made online through GOV.UK from 8 December 2020.
What should you be doing now?
Follow the above guidance and the latest updates from the government. If you have any queries, please feel free to call or email our employment team who will be able to advise on the matter.
Government guidance for the Job Support Scheme can be found here.
The updated HM Treasury's Factsheet on the Job Support Scheme can be found here.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.