On 24th September 2020, the Government announced the introduction of the Job Support Scheme (JSS) as the replacement for the current Coronavirus Job Retention Scheme (CJRS).
Although further guidance is expected to be published in the coming weeks, this article will outline the details of the scheme based on the information published to date and answer some key questions.
What is the JSS and when does it come into effect?
The aim of the JSS is a means of targeted support for those businesses most impacted by the current coronavirus pandemic. It commences on 1st November 2020 and remains in place for at least 6 months.
Will it work in the same way as the CJRS?
Not exactly. The CJRS or ‘furlough scheme’ as it is more commonly known, allows for employers to claim towards the salary of employees who are not carrying out any work at all as well as supporting those who are working fewer than their contracted hours.
The JSS will only apply to employees who are carrying out at least one third (33%) of their working hours for their employer.
What will the government contribute?
The JSS is not as generous as the Furlough Scheme.
The government will pay a third of the hours the employee is not working, subject to a cap of £697.92 per month.
What does the employer pay?
The employer will also pay a third of the employee’s salary, plus any additional hours the employee is working.
Under the scheme an employee is set to receive a minimum of 77% of their pay, depending on their rate of pay.
If I have placed an employee on furlough, do I base their rate of pay on the amount they were receiving whilst on furlough or on their contractual pay?
Payments are based on contractual pay.
Does the government contribution cover Class 1 employer NIC or pension contributions?
No. Employers are responsible for these payments.
What if I have not used furlough but my business is affected by the pandemic- can I use the JSS?
Yes you can. You needn’t have placed staff on furlough previously to claim under the JSS. However, they do need to have been on your payroll on or before 23rd September 2020.
Do I need to show that the company has been impacted by the pandemic?
It is understood that small and medium enterprises (SME’s) will not face any means testing for eligibility. However, large companies will need to demonstrate that their turnover has been impacted during the pandemic. What size of businesses this refers to, along with how the financial impact is to be assessed, is not yet clear, although part of the definition of being an SME is having fewer than 250 employees.
Is the JSS only available to certain sectors, such as hospitality?
No. It is available across all sectors.
Will I be able to claim the JSS if I must make an employee redundant and they are on notice?
No. This is a key difference between the JSS and the furlough scheme. The furlough scheme did allow employers to keep an employee on furlough and still receive payment under the furlough scheme if they were working redundancy notice. From the guidance published to date, JSS funding seems to only apply to employees who are not on redundancy notice.
It doesn’t mean that if you use the JSS you are prevented from making redundancies.
When does the JSS open for claims?
It is understood that the scheme will be open for claims in December 2020.
Do I have to pay the money back?
Do I need to get my employees agreement?
Much like the furlough scheme, any new working arrangements will need to be agreed with employees and confirmed in writing. Where employers already have short-time working clauses in the contracts/handbooks they will simply need to notify the affected staff in writing.
Our experts will be able to provide any correspondence required over the coming weeks.
Example of the JSS in practice for an employee who normally works 5 days a week and earns £350 a week.
If the employer reduces the working days to 2 days a week, this will be 40% of their usual hours.
The employer would pay £140 for the days worked.
For the remaining 3 days or 60% of hours not worked (which equals £210), the employee would earn two-thirds of her pay (£140), bringing the total earnings to £280 or 80% of their normal wage.
The Government will give a grant to the employer worth £70 (one-third) for the hours not worked, which is equivalent to 20% of the normal wages.
Does the employee have to stay on the same working pattern whilst on the JSS?
No but each short-time working arrangement must last for at least 7 days. For example, an employee could work 2 days one week, 3 days the next and so on.
Can an employee take annual leave whilst on JSS and do these hours count as hours worked?
If the current furlough rules are anything to go by, an employee taking annual leave should receive their normal rate of pay. As to whether the JSS funding will cover any time spent on annual leave, this is not yet clear.
What about the Job Retention Bonus- am I still eligible if I use the JSS?
Employers eligible to claim the Job Retention Bonus will still be able to do so if they also use the JSS.
The Job Retention Bonus is available from 15th February 2021 and 31st March 2021. It is a £1,000 one-off taxable payment to the employer, for each eligible employee that was furloughed and kept continuously employed until 31 January 2021.
For more information see here.
What if I don’t have enough work for my employees to take advantage of the JSS?
Sadly, you will be faced with having to implement lay-off/short-time working, subject to the employment contract or redundancy, or you may need to make redundancies.
You will need to seek advice from our experts who will guide you through the legal steps you need to take. We will advise and support you at each stage, ensuring our advice is bespoke to the needs of your business.
Please also se our previous article on redundancy and lay-off/short-time working:
And finally…. please note the details of the Job Support Scheme are relatively new and may be subject to change. We are expecting more details to be published as we approach the scheme commencement date and we will of course keep you informed as those details emerge. Please quote your Client Account Number on all correspondence and telephone calls. 24-hour client advice line: 0800 151 2935.