Posted on Oct 12, 2020 in Employment by Maria Gravelle
The Job Support Scheme (“JSS”) was announced in late September as the successor to the Job Retention Scheme, due to end on 31 October 2020 and which has, since the spring, allowed significant numbers of employers to fend off redundancies by placing at risk employees on furlough. Since its announcement, no detailed guidance has been published to flesh out what we know so far about the JSS. For more on what has been confirmed, please consult our earlier blog for details on topics such as which employees and businesses will be eligible.
Despite the lack of formal guidance, the Chancellor has announced that the JSS will offer an extended form of support to businesses required to close temporarily as result of the latest (and possibly ongoing) mandatory restrictions. This will be particularly relevant to businesses in the hospitality sector who will no doubt be concerned by the latest restrictions impacting Glasgow, Edinburgh and the Central Belt.
Under the JSS, eligible employers will be able to claim financial support for staff who are working at least 33% of their usual hours. The normal breakdown of salary payment under the JSS is as follows:
- The employee works at least 33% of their usual hours. Any hours worked will be paid by the employer at the employee’s usual contractual rate.
- For the hours not worked, the Government, employer and employee will each bear a portion of the costs as follows:
- One third to be paid by the Government capped at £697.72 per month, not including national insurance or pension contributions.
- One third to be paid by the employer with the usual contributions
- The final third to go unpaid, meaning the employee will still also bear the cost by accepting a reduction in salary
The latest announcement, issued on 9 October 2020, extends the JSS and offers greater support to businesses who are legally required to close their premises due to coronavirus restrictions. Full business closure as a result of restrictions will mean these employers will be unable to offer the mandatory 33% of the employee’s usual hours to qualify for support under the normal rules of the JSS. The Government is therefore offering to contribute a higher portion of financial support to employers in this situation. Reimbursement will be available as follows:
- The Government will pay two thirds (67%) of the employee’s normal salary capped at £2,100 per month, not including national insurance or pension contributions;
- The remaining third will go unpaid; and
- The employer will only be required to cover national insurance and pension contributions.
This is effectively a continuation of the Job Retention Scheme format but in a much more limited scope, as only businesses who are required to close due to mandatory restrictions will be eligible. In terms of employee eligibility, all that has been confirmed is that staff will need to be off for at least 7 days in a row to qualify. It is likely that the remaining eligibility rules under the JSS will apply to the extension, but further guidance will be needed from the Treasury and HMRC before the scheme comes into effect.
The JSS is due to start on 1 November 2020 until April 2021, with a review in January. An HMRC portal to claim reimbursements is scheduled to be available from December 2020.
Further guidance on the JSS is anticipated so please continue to consult our Knowledge Centre or sign up to join our mailing list for future employment law and business updates.
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