On Thursday 24 September, the government announced a new scheme to replace the Coronavirus Job Retention Scheme, which comes to an end on 31 October, 2020. Kate Shawcross and Hannah Pike from Harrison Drury’s employment law team outline how the new scheme will work.
[Blog updated on 23/10/2020]
The Job Support Scheme has been designed to support ‘viable’ jobs in businesses who face lower demand over the winter months and need more time to recover from the adverse effects of COVID-19.
The scheme starts on 1 November 2020 and will run for six months, until April 2021.
How does the Job Support Scheme work?
On Thursday 22 October, the government announced a revision to the Job Support Scheme (‘JSS’). An outline of the amendments are set out below:
• The JSS will now be split into 2 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.
• Employees will only need to work a minimum of 20% of their normal working hours for the employer to be eligible to claim – the employer will pay them for this time;
• 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 of a 5% contribution by the employer, up to a maximum of £125 per month; and the remaining 61.67% contribution will be made by the government, up to a maximum of £1541.75 per month.
• Employees earning £3,125 a month or less, will therefore receive at least 73% of their wages.
Employees who have been instructed to cease work in eligible, closed, premises will receive two-thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month. The employer has a discretion to enhance this payment, if they wish.
Employers retaining furloughed staff on part-time hours using the Job Support Scheme can also benefit from the Job Retention Bonus.
Eligibility criteria for the Job Support Scheme
Employers with a UK bank account and UK PAYE schemes can use the scheme. Small and medium enterprises (SMEs) are automatically eligible, whereas larger businesses will need to meet a financial assessment test and will be required to demonstrate that their turnover has fallen significantly due to COVID-19. Large employers are expected not to make capital distributions (such as dividend payments or share buybacks) while using the Job Support Scheme.
Employees must be on an employer’s PAYE payroll on or before 23 September 2020, which means a RTI submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
Employees will be able to cycle on and off the scheme and do not need to work the same pattern each month, but each short-time arrangement must cover a minimum period of seven days.
Employees cannot be made redundant or put on notice of redundancy during the period of which the employer is claiming this grant.
It is not a requirement of the Job Support Scheme for the employer or employee to have previously used the Coronavirus Job Retention Scheme.
How do you make a claim?
Employers will be able to make a claim online using the government’s website from December, 2020 and will be reimbursed in arrears for the government’s contribution on a monthly basis.
The government publication regarding the updated JSS can be found here: https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme
Consultation with employees
Employers will need to agree the new working arrangements with their employees and make changes to their employment contracts to reflect their new agreement in writing. As with the CJRS, these agreements must be made available to HMRC on request.
If you plan to claim employee support using the Job Support Scheme or wish to discuss any employment related matters, please contact Harrison Drury’s employment law team on 01772 258321.