Correct as of 23 October 2020
We first provided an update when the Job Support Scheme when the scheme was first announced here noting the details of the scheme as originally announced. Since the original announcement, and as further public health restrictions have been announced, the Job Support Scheme has been altered. In a statement to parliament yesterday, Chancellor for the Exchequer Rishi Sunak has announced further significant changes to the Job Support Scheme. This was followed up by a Policy Paper yesterday evening, which can be found here: https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme
When originally announced, the Job Support Scheme (which is due to replace the current Coronavirus Job Retention Scheme, from 1 November 2020 for a period of 6 months) proposed that employees would work at least a third of their normal working hours and be paid for those hours as normal by their employer. The cost of unworked hours would be split between the employer and the Government each paying a third of the unworked hours and the employee agreeing a wage reduction for the remainder.
Businesses facing decreased demand - Job Support Scheme Open
Employers who face a decreased demand will be able to claim for employee wages through Job Support Scheme Open in these circumstances. Yesterday's announcement has dramatically changed the Job Support Scheme in respect of the number of hours that have to be worked and the employer contribution in respect of unworked hours.
- the government will pay at least 61.67% of hours not worked (up to a maximum of £1541.75 per month);
- the employer will contribute 5% (up to a maximum of £125 per month), with the discretion to pay more than this if they wish; and
- the employee only needs to work at least 20% of their normal hours (not a third as before)
This means that full time employees will only need to work one day a week to be eligible for the Job Support Scheme, and will ensure employees will continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Businesses who are legally required to close - Job Support Scheme Closed
Many businesses, particularly in the hospitality sector, have been forced to close their business altogether due to public health restrictions and simply will not have any hours of work to offer staff. The JSS has been amended to offer additional support for these employers.
For these businesses, Job Support Scheme Closed will help them through the period that they are directly affected by restrictions by supporting the wage costs of employees who have been instructed to cease work in eligible (closed) premises.
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, although their employer has discretion to pay more than this if they wish.
An employer can claim the Job Support Scheme Open and Job Support Scheme Closed grant at the same time for different employees. An employer cannot claim for a single employee under both schemes at the same time.
General Eligibility Criteria
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
There are also general eligibility criteria on what employees can be claimed under the Job Support Scheme which is discussed further below.
Employers facing decreased demand who can claim Job Support Scheme Open
In addition to the general Job Support Scheme eligibility criteria, employers are eligible to claim the Job Support Scheme Open if:
- an employer with 250 or more employees on 23 September 2020 has undertaken a Financial Impact Test demonstrating their turnover has remained equal or fallen to show they have been adversely affected due to coronavirus; an employer with less than 250 employees on 23 September 2020 is not required to satisfy the test; and
- some, or all, of their employees are working reduced hours - employees must still be working for at least 20% of their usual hours
Large employers claiming Job Support Scheme Open, defined in the Job Support Scheme as a legal entity with 250 or more employees across their payrolls on 23 September 2020, need to complete a Financial Impact Test to evidence that their income has been impacted due to coronavirus. If the employer’s turnover has remained equal or has decreased compared to the previous year, then they will qualify. This test only needs to be taken once before the employers first claim for the Job Support Scheme.
Who can claim Job Support Scheme Closed
In addition to the general Job Support Scheme eligibility criteria, employers are eligible to claim Job Support Scheme Closed if their business premises at one or more locations has been legally required to close as a direct result of coronavirus restrictions set by one or more of the four governments of the UK. This includes premises restricted to delivery or collection only services from their premises and those restricted to provision of food and/ or drink outdoors.
Businesses premises required to close by local public health authorities as a result of specific workplace outbreaks are not eligible for this scheme.
Employers are only eligible to claim for periods during which the relevant coronavirus restrictions are in place. Employers will not be able to claim Job Support Scheme Closed to cover periods after restrictions have lifted and the business premises is legally allowed to reopen. They may then be able to claim Job Support Scheme Open if they are eligible.
Eligible employers will be able to claim the Job Support Scheme Closed grant for employees:
- whose primary work place is at the premises that have been legally required to close as a direct result of coronavirus restrictions set by one or more of the four governments of the UK; and
- that the employer has instructed to and who cease work for a minimum period of at least 7 consecutive calendar days
This is not a complete list of employee eligibility requirements for Job Support Scheme Closed and further guidance will be published by the end of October.
Employees who can be claimed for (Job Support Scheme Open and Closed)
Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020. This means an RTI Full Payment Submission notifying payment in respect of that employee must have been made to HMRC at some point from 6 April 2019 up to 11:59pm 23 September 2020.
Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them.
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 Scheme to be eligible for the Job Support Scheme.
Temporary working agreements (Job Support Scheme Open and Closed)
Employers should discuss with their staff and make any changes to their employment contract by written agreement. When employers are making decisions in relation to the process, including deciding who they should instruct to cease work, equality and discrimination laws will apply in the usual way.
To be eligible for the grant, employers must have reached written agreement with their employee (or reached written collective agreement with a trade union) that they have been instructed to and agree to stop working or reduce their working hours for a minimum of 7 consecutive calendar days.
Employers must maintain records relating to the terms of these arrangements for each employee. They must:
- notify the employee of the agreement in writing
- make sure that the agreement is consistent with employment, equality and discrimination laws
- keep a written record of the agreement for 5 years
- 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.
As with early iterations of the Coronavirus Job Retention Scheme guidance, there are still several uncertainties with the Job Support Scheme and how it will apply to certain situations. It is anticipated these will be clarified in due course through the publication of new guidance in due course:
- The guidance notes that further legislation will be published to cover employees on all forms of parental leave and these eligibility criteria will be published by the end of October.
- Further guidance has also been promised for how employers will make claims on the new scheme this is also due by the end of October.
- The Guidance notes that employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.It is unclear whether this covers employees serving notice for reasons other than redundancy or if it prevents employers from making employees redundant at any time during the operation of the scheme.
- There is also no detail provided on how issues such as holidays or sickness absence will be covered by the Job Support Scheme.
- It's uncertain how wide the definition of "premises" is for the Job Support Scheme Closed and whether a dual purpose premises, which can remain partially open, would therefore qualify or not.
Get in touch
If you have any queries please don't hesitate to contact one of the employment team to discuss further.