NOTE: On 30 October further guidance on the JSS schemes was published by the government in preparation for their implementation on 1st November. However, on 31 October, the Prime Minister announced a national lockdown across England and, as a result, the Coronavirus Job Retention Scheme (also known as the furlough scheme) has been extended until December. The JSS will now only come into effect once the CJRS ends.
As part of the Winter Economy Plan, Chancellor Rishi Sunak announced the introduction of the government’s new Job Support Scheme (JSS). The JSS aims to protect jobs and support businesses over the coming months following the original intention to end the Coronavirus Job Retention Scheme (CJRS) on 31 October 2020.
Following the initial JSS announcement, the Chancellor bowed to public pressure and subsequently announced an extension of the JSS by adding the Job Support Scheme Closed (JSS Closed). The purpose of the JSS Closed scheme is to provide further support for businesses that have been legally required to close as a direct result of the COVID-19 restrictions set by one or more of the four governments of the UK. On 22 October the government revised the original JSS to increase the scale of support available and renamed it JSS Open.
The current expectation is that JSS Open and JSS Closed will be introduced once the CJRS ends and, we assume, will now run for five months until 30 April 2021. Given the u-turn over the end of the CJRS scheme it’s not yet clear what impact this will have on the JSS Open and JSS Closed schemes so for the moment we have to assume that, following the end of the CJRS (exact date still unclear), the schemes will take effect in the form previously announced (as per the guidance issued on 30 October 2020).
The existing Job Retention Scheme, known as the furlough scheme now comes to an end in December. As this scheme comes to an end, employers will need to decide whether to allow employees to return to normal working hours. Alternatively, they can move employees onto the JSS or make them redundant if their jobs are no longer viable, in which case normal redundancy rules will apply.
Job Support Scheme Open
For employers to participate in the scheme:
The caps are based on a monthly reference salary of £3,125. ‘Usual wages’ calculations will follow a similar methodology as those for the furlough scheme albeit the JSS will be calcualte reference salary as the higher of:
Usual hours is also defined by reference to the higher of the relevant pay periods so this of course means that the JSS grant will take into account any increase in salary or increase in working hours since March 2020.
Employers must agree the temporary working arrangement for shorter hours in writing with employees. Employees do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of seven consecutive days.
Employees using the scheme will receive at least 73% of their pay, where the employer and government contributions have not been capped. Please see the example in the Appendix to this letter for further details of how the government support will be calculated.
The employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice.
Job Support Scheme Closed
The JSS Closed provides temporary support to businesses whose premises have been legally required to close as a direct result of COVID-19 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. However, businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible for the scheme.
Employers must be instructed to and cease work for a minimum of seven consecutive calendar days.
Claims must not overlap and must be made monthly in arrears. Employers will be required to cover employer NICs and automatic enrolment pension contributions in full, where applicable, but are not required to make further contribution to wage costs.
Employers must agree the new scheme with relevant employees, making any changes to the employment contract by agreement, and notify employees in writing.
The grant per eligible employee is two thirds of their ‘normal pay’ up to a limit of £2,083.33 per month. The government will provide further detail on how normal pay is calculated.
Employers will be able to use the JSS Closed whilst their premises are closed and move employees onto the JSS Open if they are eligible when they are able to re-open.
Employees cannot be made redundant or put on notice of redundancy during the period their employer is claiming the grant for that employee.
The schemes are open to all employers with a UK bank account and a UK PAYE scheme. They will be open to such businesses even if they have not previously used the furlough scheme.
All small and medium-sized enterprises will be eligible and will not be subject to financial assessment. However for the JSS Open scheme, large businesses will have to meet a financial assessment test. The scheme is only available to large businesses whose turnover has stayed level or is lower now than before experiencing difficulties from COVID-19. The government also expects that large employers will not be making capital distributions (such as dividends and share buybacks), while using the scheme.
Employees must be on an employer’s PAYE payroll at some point between 6 April 2019 and 11.59 pm on 23 September. This means a Real Time Information (RTI) submission notifying that a payment has been made to that employee must have been made on or before 23 September. Employers can only claim for employees that were in their employment on 23 September.
Employers can top up employee wages if they wish.
Job Retention Bonus
The original intention was that the two JSS schemes would sit alongside the Jobs Retention Bonus which was announced by the Chancellor in July. The Bonus will provide a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021 and who earns at least £520 a month on average between 1 November 2020 and 31 January 2021. Businesses can benefit from both schemes.
Given the changes to the CJRS and the JSS scheme it is unclear how the Job Retention Bonus scheme will be impacted given that many staff may now be on furlough through November and therefore possibly earning less than the minimum level required for the three month period 1 November to 31 January 2021. We await clarification from HMRC at this stage.
Please be assured we are here to provide you with support and please contact us if you have any queries on the JSS. Given both the number and the frequency of the updates to these schemes by the government we continue to monitor changes as they happen and will update this page where necessary.