UPDATE: The Job Support Scheme which was due to start on 1 November has been postponed until the current Coronavirus Job Retention Scheme ends in December.
The chancellor has announced a raft of new measures to support businesses in dealing with the impact of the Coronavirus pandemic. For employers, the most notable is the new Job Support Scheme, which will replace the existing Job Retention Scheme (furlough).
Guidance was updated in October to provide different types of support to businesses according to their situation. Businesses that are operating but facing decreased demand can get support for wages through JSS Open. Those businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK can get the support they need through JSS Closed.
What is the Job Support Scheme?
It has been launched to directly support the wages of people in work, giving businesses the option of keeping employees in a job on shorter hours rather than making them redundant.
Job Support Scheme Open
This is aimed at employers who can ‘operate safely but continue to face reduced demand so they may need extra support over the winter to help keep their employees attached to their workforce.’ The Open scheme gives them the option of keeping employees in a job on shorter hours as opposed to making them redundant.
The guidance states:
- The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.
- Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government.
- The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish.
- The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Job Support Scheme Closed
For those businesses legally required to close their premises as a direct result of restrictions, this scheme is designed to help them by supporting the wage costs of employees instructed to cease work.
The guidance sets out:
- Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.
- This will help protect employee incomes, limit unemployment and retain employer-employee matches so that these premises are able to reopen as quickly as possible when circumstances allow.
- Employees may also be entitled to additional financial support, including Universal Credit.
Neither the employer nor the employee needs to have benefitted from the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
- Does it cover NI & pension contributions? The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
- Can employers top up as with furlough payments? Our expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense.
- How long does an employee have to be have been on the payroll? Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
- Can you use the Job Support Scheme flexibly? Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
- How is it calculated? Employees who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
- What about redundancy? 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.
- When does the Job Support Scheme open? 1 November and we anticipate it will be via the same platform used to claim furlough payments.
This scheme involves reducing employees’ pay and therefore will need documentation which we can provide. Please talk to our team and we can help.