The Job Support Scheme – where are we at now…?
As we have known for a few months now, the Government Job Retention Scheme (the “CJRS”), which opened on 20 April and applied from 1 March, is coming to an end on 31 October. This is something which has subsidised the wages of over 9 million workers over the last 6 and a half months.
What comes next…
On 24 September, the Chancellor, Rishi Sunak, announced the introduction of the Job Support Scheme (“JSS”) which will apply from 1 November. The Government confirmed that the purpose of this is to assist those employers facing lower demand over the winter months due to the COVID-19 pandemic and who will no longer have access to the CJRS. Further Government guidance is to be published shortly but this is what we know so far.
The JSS will run for 6 months and under this employers will be required to pay their employees at least one third of their usual pay in relation to hours worked and a further third of their usual pay for the remaining unworked hours. In addition, employers will initially pay the Government contribution of a third of the usual hourly wage (capped at £697.92), an amount that can then be claimed back from the Government.
For example, if an employee’s normal monthly salary is £2,000 and they work 50% of their normal working hours, they would receive £1,000 from their employer for the hours worked, plus £333 from their employer and £333 from the government in respect of their unworked hours. The employer would claim back the £333 Government contribution from HMRC under the JSS.
For the first three months of the JSS employees must work at least 33% of their usual hours. Employees can move on and off the JSS and can work different patterns each month, but each short time working arrangement must cover a minimum of seven days.
The JSS is open to all employers throughout the UK with a UK bank account and UK PAYE scheme, regardless of whether or not their employees have previously been placed on furlough leave under the CJRS. Large businesses will need to be able to show that their turnover is lower now than before experiencing difficulties from COVID-19.
In terms of who employers can claim in respect of, employees must have been on the PAYE payroll on or before 23 September 2020 (i.e. Real Time Information submission notifying payment to that employee to HMRC must have been made on or before that date).
In addition to the JSS, Employers who bring employees back from furlough leave under the CJRS and continuously employ until January 2021 will be entitled to a £1000 Job Retention Bonus.
On Friday 9 October, Rishi Sunak, announced that the JSS will be expanded to support businesses across the UK which are required to close their premises due to coronavirus restrictions, including those businesses which are required to provide delivery and collection services only (the “Additional Scheme”). This was in preparation for the new three-tier restriction system which the Prime Minister set out yesterday, which will see pubs, bars, gyms, betting shops and casinos in areas placed in the ‘very high’ category having to close for the foreseeable future.
The Additional Scheme will also commence on 1 November and will be available for 6 months, with a review to take place in January.
Businesses will only be eligible to claim under the Additional Scheme while they are subject to specific restrictions and where employees are off work for at least 7 days. Under this, the Government will pay two thirds of employees’ salaries (or 67%), up to a maximum of £2,100 a month. Employers will not be required to contribute towards wages and will only have to cover National Insurance and pension contributions.
In contrast to the CJRS, employers will not be able to make employees redundant or put them on notice of redundancy during a period in respect of which they are making a claim under the Additional Scheme.
Full guidance is to be published by the Government so please keep an eye out for this.