Job Support Scheme
The Job Support Scheme (JSS) was originally announced on 24 September 2020. On Thursday 22 October the government announced changes to the scheme and also provided further details on the guidance. The JSS was introduced to provide financial support to businesses once the furlough scheme concludes at the end of October. The Government has said that further guidance will be available at the end of October 2020. This note sets out what we currently know.
There are two types of JSS schemes
- JSS Open
The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked. The employee will receive 66.67% of their normal pay for the hours not worked. The employer will pay 5% of the salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67%, of the salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
- JSS Closed
Where businesses have been required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK, each employee who cannot work due to these restrictions 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 discretion to pay more than this if they wish.
Details of the Scheme
The JSS will commence on 1 November 2020 and run for 6 months, until 30 April 2021. The government will review the terms of the scheme in January 2021. Employers will be able to claim in arrears from 8 December 2020, with payments made after the claim has been approved. Neither the employer nor the employee need to have benefitted from the Coronavirus Job Retention Scheme to be eligible for the JSS.
Who can claim
Employers will be able to access the Job Support Scheme if:
- they have enrolled for PAYE online
- they have a UK, Channel Island or Isle of Man bank account
All small and medium sized businesses regardless of sector, can participate in the JSS.
Larger businesses will only be eligible if their turnover has fallen during the pandemic. A large employer is an organisation with 250 or more employees on 23 September 2020. Large employers will have to undertake a Financial Impact Test demonstrating their turnover has remained equal or fallen indicating that they have been adversely affected due to coronavirus.
Training in non-working hours
Like the furlough scheme, under the JSS employees will be able to undertake training voluntarily in non-working hours. Where time spent on training attracts a minimum wage entitlement in excess of the grant payment, employers will need to pay the additional wages.
Agreement with the employees
As in the furlough scheme, to be eligible for the grant, employers must have reached written agreement with their employee (or reached written collective agreement with a trade union where the relevant terms are determined by collective agreement) that they have been offered a temporary working agreement. The agreement must be available for view by HMRC on request.
This temporary working agreement must cover at least seven consecutive days.
Employers should consult with their staff and confirm the changes in writing.
Employers should keep a written record of the agreement for five years; keep records of how many hours employees work and the number of usual hours they are not working.
This agreement must be made available to HMRC on request. HMRC will publish further guidance on what to include in the written agreement by the end of October.
Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.
National Insurance Contributions and pension contributions
The JSS grant will not cover National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer.
Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.
Employers must also pay to HMRC any employer NICs due on the full amount that that is paid to the employee, including any amounts subsequently met by a scheme grant.
Employers and Employees must also still pay pension contributions in accordance with the applicable pension scheme terms, unless the employee has opted out or stopped saving into their pension. If applicable Student Loan deductions and the Apprenticeship Levy must also still be paid.
We will provide further guidance when it is published but, in the meantime, if you have any questions please do not hesitate to contact firstname.lastname@example.org.
This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.