The Coronavirus Job Support Scheme – October Update

The Job Support Scheme (JSS) was announced as one of the measures in the Chancellor’s Winter Economy Plan in September and comes into effect from 1st November 2020. More information has been released about the scope and operation of the scheme. Although there is still more information to be released by the Government, here is what we know so far:

Overview:

• The Job Support Scheme (JSS) is designed to support businesses who are facing lower demand over the winter months due to COVID-19.
• Businesses using the JSS will continue to pay employees for time worked, but the cost of the hours not worked will be borne by both the employer and the Government, enabling the employee to keep their job.
• The Government will pay a third of the hours not worked up to a cap, with the employer also contributing a third. This will enable employees to earn a minimum of 77% of their normal wages, (where the contribution has not been capped).

Eligibility:

• All employers with a UK bank account and UK PAYE scheme registered before 23rd September 2020 will be eligible to claim the grant.
• Employee’s must therefore have been reported on a RTI submission to HMRC on or before 23rd September 2020.
• The scheme will begin on 1st November for 6 months, with the scheme to be reviewed in January 2021 by the Government.
• Payments will be made in arrears with a claims service being made available from early December 2020 via HMRC.
• It is expected that larger employers will not make capital distributions (such as dividends or share buybacks) whilst accessing the grant (further details to follow on this from the Government)
• A business can claim the JSS even if they have not previously claimed via the Coronavirus Job Retention Scheme (CJRS).

Grant Criteria:

• For the first 3 months, employees must work at least 33% of their usual hours and be paid their normal contractual wage for the hours worked. After three months, the Government will review this to potentially increase the minimum number of hours worked.
• Employees can work a shift cycle, but each short-term working arrangement must cover a minimum period of seven days.
• For every hour the employee does not work, the Government will pay a third of the employee’s ‘usual’ hourly wage. The employer will also pay a third of the usual wage.
• The Government contribution will be capped at £697.92 a month.
• The grant does not cover the cost of the employer Class 1A NICs or employer pension contributions and these will still need to be paid by the employer.
• Further details on the calculation of ‘usual wages’ is still to be issued; however, it is expected to follow similar guidelines to the CJRS.
• Employees cannot be made redundant or put on notice of redundancy during the period the employer is claiming the grant. If an Employer is forced to make an employee redundant they must stop using the JSS before giving notice of redundancy.

JSS Expansion for Closed Businesses:

• The scheme has recently been expanded to include businesses which have been legally required to close due to COVID restrictions.
• The employer will receive the grant based on the number of eligible employees who have been instructed to cease work at their relevant premises due to local or national restrictions.
• Businesses are only eligible to claim the grant whilst they are subject to restrictions and employees must be off work for a minimum of 7 consecutive days.
• Businesses that are required to close by local health authorities due to the result of a specific workplace outbreak are not able to claim.

Grant Expansion Criteria:

• The grant will provide support for employees to receive two thirds of their ‘usual’ wages for time not worked, up to a maximum of £2,100 a month (guidance is still to follow on the wages calculation from HMRC)
• Employers can claim if their premises close, and when they reopen they can claim the JSS under the rules for firms facing reduced demand over the winter period.

Job Retention Bonus Scheme:

• Employers can still claim the Job Retention Bonus (JRB) for eligible employees as part of the JRS and use the JSS grants to help pay employee’s wages to meet the JRB minimum income threshold of £520.00 per month (for the 3 months between November 2020 and January 2021)

HMRC Checks:

• Employers must agree once again the contractual changes with employees in writing and, as with the CJRS, they must receive written consent from the affected employees.
• HMRC will publish the names of all employers who have used the JSS scheme allowing employees to find out if their employer has fraudulently claimed under the scheme with a hotline set up to investigate such cases.

We will issue further updates on this scheme once additional information has been published by the Government in the late Autumn.

If you have any questions about the Job Support Scheme please feel free to contact Amy Cowling, Employment and Rewards Manager at Friend Partnership Limited on 0121 633 2000 or by email at amy.cowling@friendllp.com