The Job Support Scheme (JSS) will be available to employers from 1 November 2020; and is taking over from where the furlough scheme (CJRS) ends on 31 October 2020.
Rishi Sunak explains that “The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.” The JSS provides that the employer will continue to pay their employees for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and in return the employee will keep their job.
Key facts about the JSS are set out below (however further guidance is expected as such the devil may be in the detail of the scheme rules):
- It is designed to support viable jobs in businesses who are facing lower demand over the winter months due to Covid-19.
- It will run from 1 November 2020 until 30 April 2020.
- All small and medium sized enterprises (SMEs) will be eligible to access the JSS. Larger businesses will have to meet a financial assessment test and demonstrate that their turnover is lower as a result of covid19. There is also an expectation that if larger organisations access the JSS that they will not be making capital distributions (e.g. dividends) to shareholders.
- There is no requirement to have used the CJRS to be eligible for the JSS.
- For the first three months of the JSS, employee must be working at least 33% of their usual hours, and must be paid their normal contracted wage for those hours. (After 3 months, the Government will consider whether to increase this minimum hours threshold).
- For the remaining time not worked, the employee will be paid up to two-thirds of their usual wage. Both the Government and employer will pay a third each of the employee’s usual hourly wage. The Government contribution will be capped at £697.92 a month.
- Employees will earn a minimum of 77% of their normal wages (unless they are affected by the cap on the Government’s contribution).
- Grant payments will be made in arrears, reimbursing the employer for the Government’s contribution. In contrast to the CJRS, the JSS grant will not cover employer NICs or pension contributions, although these contributions will remain payable by the employer.
- Employees must be on the employer’s PAYE system on or before 23 September 2020 (i.e 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).
- Employees will be able to be rotated 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.
- Employers must agree the new short-time working arrangements with their staff, making changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
- Employees cannot be made redundant or put on notice of redundancy whilst their employer is claiming a grant under the scheme.
- Employers using the JSS will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
Employers have a lot to consider and plan over the coming weeks. In the first instance, employers have to consider whether to access the JSS.
Under the JSS, employers will be paying staff for hours not worked, and as such some employers may prefer not to take advantage of the JSS and instead consult with staff about reducing their hours of work and pay. Employers will also have to consider whether jobs are viable, evaluating the cost of retaining staff and the cost of making redundancies. Those who wish to take advantage of the JSS need to take preparatory steps to agree changes to employment contracts.
This is only intended to be a summary and not specific legal advice. If you would like further information about the JSS, or advice generally about managing your workforce during these unprecedented times, please do contact a member of our employment law team.
Winter Economy Plan https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan
Job Support Scheme https://www.gov.uk/government/publications/job-support-scheme