Job Support Scheme – What we know so far

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Job Support Scheme – What we know so far

Published 25 septiembre 2020

The furlough scheme (CJRS) will come to an end on 31 October. Yesterday the Chancellor announced its successor – the Job Support Scheme (JSS). The stated intention of the Scheme is to support “viable” jobs in businesses who are facing lower demand in the winter due to COVID-19. The Chancellor also announced a series of other measures which will also help businesses.

The Government has issued a fact sheet on the JSS and further Guidance on the JSS, which will be critical for business decisions, is awaited. As ever, the devil will be in the detail. In this alert we summarise what we know so far:

Timing

The scheme will begin on 1 November 2020 and will run for six months - until 30 April 2021.

How will it work?

  • The JSS in a wage subsidy scheme.
  • For the first three months of the JSS the employee will need to work and be paid for at least one-third of their normal hours (33%) although they can work and be paid for more.
  • For the employee's remaining hours, those not worked (i.e. up to 67%): one-third of that (up to 22% of the normal wages) is paid by the employer and one-third (up to 22% of the normal wages) is paid by the Government.
  • The level of the Government grant will be calculated based on the employee's usual (pre furlough) salary, capped at £697.92 per month.
  • This means an employee will receive at least 77% of their normal pay (where the government grant has not been capped). This is summarised in the table below, taken from the Government factsheet.
  • The JSS will not cover class 1 employer NICS or pension contributions; these contributions will remain payable by the employer.
  • After 3 months, the Government will consider whether to increase the minimum hours threshold beyond one-third.
  • Employees will be able to come on and off the scheme and do not have to be working the same pattern each month. However, each short-time working arrangement must cover a minimum period of seven days.

Hours Employee Worked

 

33%

40%

50%

60%

70%

Hours Employee Not Working

67%

60%

50%

40%

30%

Employee Earnings (% of normal)

 

78%

80%

83%

87%

90%

Gov’t Grant (% of normal wages)

22%

20%

17%

13%

10%

Employer Cost (% normal wages)

55%

60%

67%

73%

80%

Who is eligible?

Employers:
  • The JSS will be open to employers throughout the UK with a UK bank account and a UK PAYE scheme, regardless of whether they have used the CJRS.
  • All small and medium sized businesses (SMEs) will be eligible. However, larger businesses will only be eligible if their turnover is lower now than before experiencing difficulties from COVID-19. As yet there is no defined threshold as to what constitutes a SME or a larger business. We are also awaiting guidance on what larger businesses will have to do to demonstrate they have been adversely affected by the pandemic; however, the Government states that it expects that large businesses will not be making capital distributions (such as dividends or share buybacks) while using the JSS.
Employees:
  • Employees must be on an employer’s PAYE payroll on or before 23 September 2020 to be eligible.

Redundancies

In order to emphasise that this scheme is to support “viable” jobs, employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

What about the Job Retention Bonus?

As long as they meet the eligibility criteria, employers using the JSS will also be able to claim the Job Retention Bonus.

Contractual changes

As was the case with the CJRS, employers must agree the new short-time working arrangements with their employees. Employers must make any changes to the employment contract by agreement and notify the employee in writing.

What does this mean for employers?

The JSS is less generous than the CJRS, nevertheless it will be welcomed by some employers facing the end of furlough. However, the need for the employee to work and be paid for at least a third of their normal hours will mean that the scheme may not be of any help in sectors which still remain largely shut down.

Before making crucial commercial decisions employers will want to consider the fine details of the scheme. We will, of course, keep you updated as and when the further guidance is published.

 

Authors

Joanne Bell

Joanne Bell

Manchester

+44 (0) 161 934 3179

Louise Bloomfield

Louise Bloomfield

Leeds

+44 (0) 113 251 4717

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