Coronavirus Job Support Scheme (JSS Open)

UPDATE 1st November 2020 - The Coronavirus Job Retention Scheme (Furlough) initially set to expire 31st October has now been extended until December following national lockdown in November. During this extension, the scheme pays 80% of salary (capped at £2,500) for those furloughed, all of which is funded by the Government. More generous compared to recent months when employers have been asked to contribute toward furlough pay. Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions The Job Support Scheme described in this article has therefore been postponed until the furlough scheme ends. Yet another twist to keep us on our toes

Coronavirus Job Support Scheme (JSS Open)

It's been quite the year for us this year, for many reasons I don't need to list here, but also in keeping up with all the changes in schemes offered by the Government to protect jobs during the pandemic. So the Job Retention Scheme for furloughed employees comes to and end this week, what next?

Chancellor, Rishi Sunak, initially introduced a Job Support Scheme (JSS) aimed at businesses who have experienced a downturn in business with a view to keep their people working on a part-time basis. The scheme wasn't proving popular however, staff needed to work a minimum of 1/3 a week (did that amount of work exist for the whole team?) the employer needed to pay full wages for the hours worked PLUS 1/3 of wages for the hours the employee didn't work. The government were stumping up the other 1/3 of salary for hours not worked and the employee took the hit on the remaining third. Did this sound great? It really didn't; understandably most employers could not see this as a suitable alternative to redundancies.

So version two was announced last week, same name: Job Support Scheme (JSS), (JSS OPEN for businesses who can open during the restrictions and JSS CLOSED for those who need to shut up shop).

Crucially this time (for JSS OPEN ), the employee only has to work a minimum 20% (1 day per week for 5-day workers) of their usual hours, the employee is paid in full for those hours, by their employer. They are then paid 2/3 of their normal pay for the hours not worked (subject to a cap) however the Employer only pays 5% of that amount, with the Government making up the difference. So the employee will still be paid 2/3 of their pay for all hours not worked. Don't forget the often unmentioned Employers NI and pension, this is to be covered off by the Employer. Also, employers can top up the pay for hours not worked should they wish.

So I mentioned a cap above. This references the same amount in the previous job retention scheme, when 80% of salary was capped at £2,500 (100% equivalent is £3,125 a month, or £37,500 a year).

Now the cap for employers to pay 5% for those hours not worked (unless they wish to pay more) is £125 per month, with the Government capping their 61.67% contribution to £1,541.75 per month.

This ensures employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

This scheme opens on November 1st, claims can be made (in arrears) from December 8 2020, payments will be made after the claim is approved. Neither the employer nor the employee is required to have previously claimed in the Coronavirus Job Retention Scheme to be eligible for the JSS, but new eligibility rules do apply (see below). The employee must have been included on a PAYE payroll at some point between the dates of 6th April 2019 and 23rd September 2020. Employers can only claim for employees who were in employment on 23rd September 2020. If the employment ceased after 23rd September 2020 but the employee was subsequently rehired, employers can claim for them.

In addition to the general eligibility criteria set out above, employers are eligible to claim the JSS 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

• some, or all, of their employees are working reduced hours - employees must still be working for at least 20% of their usual hours

Finally, To be eligible for the grant, employers must have reached written agreement with their employee (or reached written collective agreement with a trade union where the relevant terms are determined by collective agreement) that they have been offered a temporary working agreement. The agreement must be available for view by HMRC on request and must cover at least 7 consecutive days.

Employers need to discuss with their staff and make any changes to their employment contract by written agreement. When employers are making decisions, including deciding to whom they should offer reduced hours, equality and discrimination laws will apply in the usual way.

Employers must maintain records relating to the terms of the temporary working agreements for each employee, and:

• make sure that the agreement is consistent with employment, equality and discrimination laws

• keep a written record of the agreement for 5 years

• keep records of how many hours employees work and the number of usual hours they are not working

• 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.

HR Connected are happy to support and advise regarding consultation, written agreements to change the employment contract and ensuring the process of implementing the JSS Open scheme runs smooth, contact wendy@hrconnected.co.uk for more information.