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Coronavirus: New Job Support Scheme

Employment / 24 September 2020

On 24 September 2020, the government announced its new Job Support Scheme (“JSS”).  This will replace the current Coronavirus Job Retention Scheme which ends on 31 October.

In brief, under the JSS, the employer will continue to pay employees for time worked, but the burden of hours not worked will be split between the employer and the government (through wage support) and the employee (through a wage reduction), with the aim that the employee keeps their job.

We set out below the details we know so far about the JSS.

Background and eligibility

  1.  The purpose of the JSS is to support employers who face a lower demand over the winter months due to coronavirus.  It will run from 1 November 2020 until 31 May 2021.
    2.   All small and medium enterprises will be eligible to use the JSS.  However, for large businesses to be eligible, they must demonstrate they have been adversely affected by coronavirus.  We are waiting for clarification of what this means in practice and about which businesses qualify as small, medium and large.
    3.   Employees must have been on their employer’s PAYE payroll on or before 23 September 2020 and an RTI submission must have also been made before that date.
    4.   Employees need not have been previously furloughed in order to qualify for the JSS.
    5.   The employee must not have been served notice of redundancy before being placed on the JSS.

How it will work

6.   Employees using the JSS must work and be paid for a minimum of 33% of their “usual” hours.  For those employees who have previously been furloughed, “usual hours” and “usual pay” will mean their normal pre-furlough contractual rates of hours and pay, not their furloughed rates.  It is unclear at present how the JSS will apply to those employees who do not work standard hours, such as those on zero-hours contracts.
7.   For the hours not worked, the government and the employer will each contribute one-third of the employee’s lost wage.
—  For example, an employee could work 50% of their normal hours.  They will be paid by their employer for this.  In addition, the government and their employer will each contribute one-third of the employee’s normal wage in respect of the remaining 50% of hours.
—  As a minimum, if an employee works 33% of their normal hours, they will receive 77% of their gross salary.
8.   The government contribution per employee is capped at £697.92 each month.
9.   Employers making use of the JSS can also claim for the Job Retention Bonus, if eligible.
10.   Employees can “cycle” on and off of the JSS, but each cycle must be a minimum of seven days in length.

Steps for employers

  1.  Any period of reduced working hours or “short time working” should be discussed and agreed between employer and employee.  The employee should be notified of this change in writing and their employment contract should be updated.  HMRC can request a copy of this agreement.
    2.   All employees should be treated consistently and fairly.
    3.   For future recruits, employers could consider updating their employment contract precedents to include a short time working clause.

We are still waiting for detailed guidance on the JSS to be released.  If, in the meantime, you require assistance with the JSS or short-time working, please get in touch.

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