JSS Open and Closed

Background

On 24 September 2020, Chancellor Rishi Sunak announced that the existing Coronavirus Job Retention (furlough) Scheme would be replaced by the first iteration of the Job Support Scheme, whereby an employee had to work at least 33% of their normal hours. The employee would be paid by their employer for that work and the remaining 67% of normal pay would be paid for by the employer (22%), the government (22%) and the employee (23% - by means of a salary reduction).

That has now been replaced with a new iteration of the Job Support Scheme, which gives more support to employers if their business has been hit by a fall in demand on account of coronavirus.

Revision to the Job Support Scheme

As previously advised, the Job Support Scheme (JSS) will begin on 1 November and continue until 30 April 2021, but it is now split into two schemes: JSS Open and JSS Closed. The latter applies to businesses that have been required to close under lockdown regulations.

Full details of the Job Support Scheme can be found here:

https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme

The following points apply:

· Employees must be on an employer’s PAYE payroll on or before 23 September 2020;

· Eligible employees can be on any type of contract, including zero hours or temporary contracts;

· Employees do not need to have been furloughed under the Coronavirus Job Retention (Furlough) Scheme in order to be eligible for the Job Support Scheme;

· Employers claiming the Job Support Scheme can still claim the Coronavirus Job Retention Scheme Bonus;

· Organisations that are fully publicly funded should not use the Job Support Scheme. However, organisations can use the Job Support Scheme if they are not fully funded by public grants, for the proportion of their revenue disrupted due to coronavirus;

· Employers can top up wages beyond the amounts specified below;

· All SMEs (defined as an employer with fewer than 250 employees on 23 September 2020) are eligible for the Job Support Scheme. Large companies are eligible if their turnover has fallen due to coronavirus. They will have to take a Financial Impact Test to demonstrate this; and

· Under both JSS Open and Closed, the employer must pay national insurance and pension contribution on the full amount (i.e. hours worked, government top-up and employer top-up).

1. JSS Open

Under JSS Open, the employee will have to work a minimum of 20% of their normal hours and the employer will continue to pay them as normal for the hours worked. Any hours spent in training and paid for by the employer at full pay can be counted towards 20% of the employee’s usual hours.

Employees will receive two-thirds (66.67%) of pay for the hours they do not work, made up of contributions from the employer and the government. In respect of that two-thirds top up, the employer will play 5% of salary and the government will pay 61.67% of salary up to a maximum of £1,541.75 per month. This cap means that employees will continue to receive at least 73% of their normal salary on a salary of £3,125 per month.

2. JSS Closed

Under JSS Closed, businesses that are legally required to close their premises as part of local or national coronavirus restrictions will receive 67% of employee wages from the government, up to a maximum of £2,083.33 a month. Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.

Next steps

Under both JSS Open and Closed, the agreement must be confirmed in writing. HMRC will publish guidance on the contents of the agreement by the end of October. Simply-Docs will aim to produce the relevant agreement template(s) as soon as possible after the guidance is published.