Amidst growing criticism from businesses entering localised lockdowns across the UK, the Chancellor announced further changes to the Job Support Scheme which dramatically increase the financial support available from the Government.
The Job Support Scheme will now be split into two schemes which provide different levels of support to employers according to their situation:
- Employers who remain open but face decreased demand can use JSS Open.
- Employers who are legally required to close their premises can use JSS Closed.
Both schemes will run for an initial six months from 1st November 2020 and will replace the Coronavirus Job Retention Scheme. Importantly, and unlike the “furlough scheme”, employers cannot claim for employees who have been made redundant or given notice of redundancy during the relevant claim period.
We have summarised the key aspects of each branch of the Job Support Scheme below.
- This scheme is available to employers who are not legally required to close, but which still faced decreased demand and require support to retain their workforce on reduced hours rather than make redundancies.
- Employees must work a minimum of 20% of their normal hours and are paid as normal for these.
- Employees will be paid for two-thirds (or 67.67%) of the hours they do not work, with the cost split between the employer and the Government. Employees will forgo the final third of their normal pay for these hours.
- From the funded 67.67%, employers must pay 5% up to a cap of £125 per month per employee. The Government will cover the remaining 61.67% up to a cap of £1,541.75 per month per employee. This effectively ensures that employees who normally earn £3,125 each month or less will continue to receive 73% of their normal wages.
- Grant payments will be made in arrears and will not cover employer NICs or pension contributions, which remain payable by the employer.
- Employers must agree a written temporary working arrangement with each relevant employee to claim support. This agreement must be obtained in accordance with normal principles of employment law and records retained for five years.
- Where a selection process is necessary, employers should be mindful of their duties under anti-discrimination legislation and act fairly and reasonably.
- This scheme is available to employers who are legally required to close their premises to as a direct result of coronavirus restrictions set by Parliament or a devolved government, including the Northern Irish Assembly.
- JSS Closed is designed to give enhanced support to employers for the period in which they are directly affected by enforced closure under local or national coronavirus restrictions.
- This will include premises restricted to delivery or collection only services from their premises and those restricted to provision of food or drink outdoors. However, employers who are required to close by public health authorities to deal with a specific workplace outbreak are not eligible for support from JSS Closed.
- Employers can only claim for employees who have been instructed to cease work at a premises which is their primary place of work and is legally required to close, for a period of at least seven days.
- Employees will receive two-thirds of their normal pay, up to a maximum of £2,083.33 per month. Payments will be made by the employer and fully funded by the Government under the scheme.
- Employers must reach a written agreement with each relevant employee that they have been instructed to and agree to stop working for a minimum of 7 consecutive calendar days. The agreement must be available for view by HMRC on request and kept for five years.
Key Common Requirements
- Employers can only claim grant support grant for employees who were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020 with an RTI submission notifying payment in respect of that employee made between 6 April 2019 up to 11:59pm 23 September 2020.
- Like the furlough scheme, employers can claim support for any type of contract, including zero-hours or temporary contracts. Agency workers are also potentially eligible.
- Employees do not need to have previously been furloughed to be eligible.
Please contact Jack email@example.com or your usual Tughans contact, who can refer you to the employment team.
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.