The Job Support Scheme: The government’s new scheme to further help retain employees

The government introduced the Job Support Scheme (JSS) to replace the Coronavirus Job Retention Scheme, which comes to an end on 31 October, 2020.

Harrison Drury’s employment team take a more in-depth look into the newly updated JSS Open and JSS Closed schemes.

[Blog updated on 27/10/2020]

How does the Job Support Scheme work?

On Thursday 22 October, the government announced a revision to the Job Support Scheme (JSS) amid calls for more support to protect viable jobs in businesses facing lower demand over winter due to the on-going pandemic and the new three-tier lockdown system in England. An outline of these amendments are set out below:

• The JSS will now be split into two categories: ‘JSS Open’ and ‘JSS Closed’.
• JSS Open is for business which remain open, but face decreased demand.
• JSS Closed is for businesses which have been legally required to close as a direct result of the coronavirus restrictions.

JSS Open – What are the changes?

To qualify for the JSS Open, the minimum number of hours required for employees to work has dropped from 33% to 20%. The hours worked by the employee will be paid in full by the employer.

The employee will, in addition to the pay for hours actually worked, receive 66.67% of their normal pay for any ‘unworked hours’, made up by the following:

• The government will pay 61.67% of non-worked hours up to a cap of £1,541.75 per month (up from the maximum £697.92 per month originally); and
• The employer will pay 5% of non-worked hours up to a cap of £125 per month and NICs and automatic enrolment pension contributions. Employers can top up employee’s wages above the 5% contribution, at their own discretion.

In total, those on the JSS Open will now earn at least 73% of their usual pay, unless they earn more than the government’s contribution cap (£1,541.75 per month). This cap on wages will equate to around £3,125 per month or £37,500 per year.

Who is eligible for the JSS Open?

• All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer not the employee needs to have previously used the Coronavirus Job Retention Scheme. However, an employee cannot be put on JSS Open if they are on redundancy notice of have already been made redundant.
• The JSS Open is available to most, but not all employers. Only small and medium-sized businesses are eligible, defined as 250 or less employees on 23 September, 2020. Any businesses outside this scope (with more than 250 employees), will have to meet a financial impact test, to determine whether or not the turnover has stayed level or is lower now than before experiencing difficulties from Covid-19.
• An employee must have been working for their employer on 23 September, 2020. A RTI submission must also have been made of the employees’ behalf by the employer at some point between 6 April 2020 and 23 September, 2020. If an employee stopped working for an employer after 23 September, 2020, but were subsequently re-hired, they will also be eligible.
• Staff on any type of contract are eligible, including those on variable or zero hours and agency workers.
• Fully publicly funded organisations are not expected to use the scheme, as has been the case with the CJRS, but partially publicly funded organisations are eligible where their private revenues have been disrupted.
• Employees will be able to cycle 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 consecutive days.

JSS Closed – an option for businesses forced to close

The JSS Closed is more generous than JSS Open discussed above, with the government covering 67% of an employee’s wage where a business is forced to close for at least seven days. As with the JSS Open scheme, the JSS Closed scheme will start on Sunday 1 November and will initially run for six months, with a review in January.

The state will pay the employer 67% of the employees’ salary, up to a maximum of £2,083 per month; this applies for any time the employee is unable to work because the workplace has been forced to close. The employer can ‘top-up’ an employee’s wage if they wish.

Employers will be required to cover any NICs and automatic enrolment pension contributions in full as a contribution.

Who is eligible for JSS Closed?

• As with the JSS Open scheme, only small and medium-sized businesses, defined as being a firm with less than 250 employees on 23 September, 2020, are eligible. Any business with 250 or more employees will need to take a coronavirus financial impact test to assess whether it is eligible.
• A business will qualify if it has been legally forced to close because of lockdown. It does not matter if the lockdown is part of a local or national measure.
• Businesses that partially close, for example a restaurant that continues to do take-outs and deliveries, who are unable to have diners eating in, can also access the scheme, but only for employees who cannot work.
• As above for the JSS Open, an employee must have been working for their employer on 23 September, 2020 and employees must be off work for seven consecutive days to qualify.
• Those on zero-hours contracts are eligible and agency workers will also be able to take part, provided they are paid via PAYE.
• An employee cannot work or volunteer for the employer while on the Closed JSS. Though an employee can work or volunteer for a different business while furloughed, providing the contract does not forbid the employee from doing so.

How can I claim?

• The schemes will run for six months from 1 November, 2020.
• Employers will be able to make a claim online through gov.uk from 8 December, 2020 and they will be paid on a monthly basis.
• Grants will be payable in arrears, meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made, and that payment has been reported to HMRC via an RTI return.

HMRC checks

• HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.
• It is important that employers agree the new short time working arrangements with their staff by making any changes to the employment contract by agreement and notify the employee in writing, the agreement must be made available to HMRC on request.
• HMRC intend to publish the names of employers who have used the scheme, and the public can report any suspicions of fraud to HMRC if they have evidence to suggest and employer is abusing any of the schemes.
• Employees will be able to check if their employer has made a claim relating to them via their personal tax accounts.

It is important to comply with the requirement to agree any short-time working arrangements with employees in writing, which must be kept for five years for HMRC purposes. Harrison Drury’s employment team can assist you in implementing the JSS by providing tailored expert advice, guidance and drafting formal working agreements based on any new arrangements for your workforce. If you wish to discuss the JSS further, then please contact our employment team on 01772 258321.