Revamped Job Support Scheme

The Revamped JSS

Last Thursday and in the face of growing discontent for the lack of Government support for employers with decreased demand (but not required to close), the Chancellor announced an overhaul of the job support scheme (JSS) which starts next Sunday 1 November 2020. 

Further guidance is due to be published before the end of this month, but in the meantime, the Government has issued a policy paper providing greater detail of the revamped scheme including some example calculations.

Certain aspects of the scheme remain unchanged, including under what is now called “JSS Closed” where a business is legally required to close its premises due to local or national lockdown restrictions (such as under English very high Tier 3).  In this case, an employer will be able to claim where an employee is off work for at least seven consecutive days because of the closure.  The employer may claim a grant from the Government for two-thirds of eligible employees’ normal pay (up to £2,083.33 per month).  They still will not have to make any contribution to the employee’s wages. 

However, the big change is in relation to what is now to be known as “JSS Open” – those businesses facing decreased demand, but not required to close, such as those in English high Tier 2.  For the first three months of the scheme, employees must work at least 20% (previously 33%) of their “usual hours” (pre-furlough if relevant) for which they must be paid by their employer.  The Government will decide in due course what rule should apply for the second three months of the scheme. 

The employer must also pay the employee for 66.67% (roughly two-thirds) of those hours not worked at the employee’s “reference salary” (to be calculated in a similar way as under the CJRS).  The employer’s contribution will be 5% (previously 33% and now up to a maximum of £125 per month) and the Government will contribute 61.67% (previously 33% and now up to a maximum of £1,541.75 per month, previously only £697.92 per month).  On this basis, employees will receive at least 73% of their normal wages, where they earn £3,125 a month or less.

In relation to both JSS Closed and JSS Open, the payment of the grant will be arrears, the employee must not be under notice of redundancy (or made redundant) during the relevant period and the employer must pay both employer NICs and auto-enrolment pension contributions.  The employer will be able to “top up” payments in either JSS category if they wish.

It is still the case that larger businesses (those with 250 employees or more) will only be able to take advantage of the JSS where their turnover can be shown to have decreased (based on quarterly VAT returns where available) as a result of COVID-19.  Although they will not be expected to declare dividends for shareholders during this time, this will not be made a legally-binding obligation.  Smaller and medium-sized businesses, together with registered charities with 250 employees or more, will not have to show such an adverse financial impact. 

Claims can only be made for employees who were on the employer’s payroll before 23 September 2020 and not under notice of redundancy (or made redundant).  Employers will claim monthly in respect of seven-day-long periods under which the employee works short hours, although the employee’s working hours may vary from week to week.  The first claims may be submitted on 8 December 2020 and the Government will set up a portal similar to that for the Coronavirus Job Retention Scheme (CJRS).

As with the CJRS, the employer must agree any reduced hours and reduced pay arrangement with the employee, setting it out in writing.  Details of the agreement must be kept for five years, together with details of hours worked and not worked.

The policy paper indicates that an employee may undertake training voluntarily during unworked hours under JSS Open, but must be paid at least the national minimum wage including these hours.

There are many details of the JSS which are yet to be clarified, such as whether employees on leave of any kind can be included, whether workers are covered and the effect of any TUPE transfer.  The Government has said that it will issue more detailed guidance containing more example calculations by the end of October 2020.  A Treasury Direction will also follow in due course.

As always, please contact one of the team at Synchrony Law for advice and guidance on any employment issue.