The Chancellor announced a new Job Support Scheme (“JSS”), which is to run from November 2020 for 6 months and replace the current Coronavirus Job Retention Scheme, which ends on 31 October 2020.
Whilst businesses deal with suppressed demand over the winter months, the Government has introduced the JSS to support the wages of those in viable jobs. The JSS will keep employees in jobs, but with shorter hours, rather than making them redundant.
Further detail on the JSS is expected once guidance has been released by the Government. However, from the Chancellor’s statement today and the Winter Economy Plan, we now know that the following applies to the JSS:
- The JSS will be introduced on 1 November 2020 to protect only viable jobs;
- Employees must work at least a 1/3 of their normal hours and be paid for those hours as normal by their employer;
- The Government and employers will increase those wages by covering 2/3 of the pay that employees have lost by the reduction in their working hours, and the employees will keep their job;
- For every hour not worked the employer and government will each pay 1/3 of the employee’s usual pay, subject to conditions;
The table below assists with how the JSS is envisaged to work;
|Hours Employee Worked||33%||40%||50%||60%||70%|
|Hours Employee Not Working||67%||60%||50%||40%||30%|
|Employee Earnings (% of normal)||78%||80%||83%||87%||90%|
|Gov't Grant (% of normal wages)||22%||20%||17%||13%||10%|
|Employer Cost (% normal wages)||55%||60%||67%||73%||80%|
- The level of grant under the JSS will be calculated using an employee’s usual salary, but the government contribution will be capped at £697.92 per month;
- Employees must not have been made redundant, nor given notice of redundancy during the period within which their employer is claiming the JSS grant;
- Employer’s will be reimbursed in arrears for the government contribution;
- Anyone who has been employed since 23 September 2020 is eligible;
- All Small and Medium Enterprises (SMEs) will be eligible to apply for the JSS, that have a UK bank account and a UK PAYE scheme;
- Larger businesses can only apply to the JSS where their turnover or revenue has fallen or been adversely affected by COVID-19, there will be restrictions on the capital distributions (such as dividends) of large companies to their shareholders, whilst they are in receipt of JSS;
- The JSS will be open to employers who did not originally claim any furlough payments under the Coronavirus Job Retention Scheme and run for 6 months starting in November 2020; and
- Employers retaining furloughed staff on shorter hours can claim under the JSS and the Job Retention Bonus (a £1,000 one-off payment for furloughed employees who remain continuously employed through to 31 January 2021, subject to eligibility criteria).
Matthew Potter comments:
“The introduction of a successor to the CJRS will no doubt be welcomed by businesses still facing a difficult future not helped by a potentially difficult winter period, in light of reduced demand and further social distancing; the overall impact of the scheme will be to help preserve jobs.
Further detail on the Job Support Scheme will follow in the coming days and weeks and we shall endeavour to keep you as up to date as possible with the detail.”
If you require any assistance or have any questions on the Job Support Scheme and its impact on your business, please do not hesitate to get in touch with a member of the Howes Percival Employment Team.
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