The Job Support Scheme (“JSS”) was originally to replace the Coronavirus Job Retention Scheme (”CJRS”) with effect from 1 November and run until 30 April 2021. Its implementation has been postponed due to the extension of the CJRS until 31 March 2021.
There are intended to be two versions of the JSS – one for open businesses (“JSS Open”), and one for businesses that are required to close due to Covid-19 restrictions (“JSS Closed”).
HMRC published a policy paper containing more details on the Job Support Scheme, with the intention that further guidance would follow.
Under the JSS Open, employers will continue to pay employees for time worked but the cost of hours not worked will be split between the employer, the government (through wage support) and the employee (through a wage reduction). Employers are to be liable for all employer’s national insurance contributions and pension contributions, including on the element of the wages funded by the State.
Under the rules as originally announced, the government was to pay a third of hours not worked up to a cap of £697.92, with the employer also contributing a third (uncapped). However, this has been modified so that employers will be required to pay not less than the lower of 5% of the cost of unworked hours or £125.00 per month, and the government will now provide 61.67% of wages for hours not worked, up to a cap of £1541.75 per month. The caps therefore bite against those earning more than £3,125 a month.
The JSS Open will only apply in respect of employees who are working at least 20% of their usual hours (reduced from 33%, as first announced) and who were on the employer’s PAYE payroll on or before 23 September. This means a Real Time Information (“RTI”) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020. Employees will be able to go on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of 7 days.
Unlike the CJRS, the Open Scheme will not be open to all employers. All employers with fewer than 250 employees as of 23 September, will be able to access the scheme, but larger employers will only be eligible if they satisfy a financial impact test – unless they are a charity registered with a UK charity regulator or which is exempt from such registration.
To pass the financial impact test, large employers will need to show that their turnover will need have remained equal or decreased compared to the previous year. The policy paper explains how the test is to be applied to employers who are VAT registered and states that further guidance is to be available at the end of this month.
Eligible employers will be able to use the JSS irrespective of whether they have previously furloughed employees under the CJRS. Employers who have utilised the CJRS will still be able to claim the Job Retention Bonus in respect of employees who are subject to the new scheme, if the eligibility criteria are met.
A criticism of the CJRS, from some quarters, was that it can be utilised in respect of employees who are being made redundant in order to fund notice pay. In contrast, employers will not be able to give employees notice of redundancy while claiming under the JSS.
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