As we announced in our blog post here on 24 September the UK Chancellor outlined additional government support to help businesses and workers impacted by COVID-19, which would come into force once the Coronavirus Job Retention Scheme (CJRS) ends on 31 October 2020. However, with further restrictions being placed on businesses and the introduction of a three tier lockdown, the Government announced on 22 October that the level of support to be provided under the Job Support Scheme (JSS) would be increased.
The JSS relating to businesses that can remain open has been renamed the Job Support Scheme Open (JSS Open). The main changes which have been made to the JSS Open is that the minimum hours required for employees to work has dropped from 33% to 20% and the employer contribution for non-worked hours has dropped from one third to 5%.
The purpose of the JSS Open is to protect jobs in businesses who can operate safely but are facing lower demand over the winter months due to Covid-19. This is likely to impact a number of businesses who fall into Tier 2 areas in the Government’s tier arrangements.
The amended scheme proposal is that employees must work at least 20% of their usual hours. Employers will continue to pay the employees for the wages for the hours that they work. For the hours that the employees don’t work, they will be paid a total of two-thirds of their usual hourly wage up to a cap. Employers will be required to pay 5% of non-worked hours capped at £125 per month. In addition, the employer will need to pay National Insurance Contributions and automatic enrolment pension contributions in full as a contribution. Employers can top up employee’s wages above the 5% at their discretion. The Government will pay the remainder, meaning 61.67% up to a maximum of £1,541.75 per month.
Where employers are legally required to close their business, the scheme is being termed the JSS Closed and employees who cannot work during that period will receive two-thirds of their normal pay up to a maximum of £2,083.3 per month.
The same eligibility requirements apply with regard to employees whether under the JSS Open or JSS Closed. The employees must have been on the PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020. Employees do not have to have been furloughed under the CJRS to be eligible for the JSS. The important point to note is that an employer cannot claim both JSS Open and JSS Closed in respect of a single employee for the same day.
The Government has confirmed that large employers who are required to satisfy a financial impact test before claiming under the JSS Open are employers with over 250 employees on 23 September 2020. The Financial Impact Test is evidence that the employers’ income has been impacted due to coronavirus. Where employers are VAT registered then the employer should compare the total sales figures on their VAT return with the total sales figures for the same period in 2019. The Policy paper published by the Government sets out details on how to make this calculation.
To be eligible for the JSS Open grant employers must have reached a written agreement with their employee (or a written collective agreement with a trade union where appropriate) that they have been offered a temporary working agreement. The agreement must be available to be viewed by HMRC on request. The agreement must cover at least seven consecutive days.
The JSS Closed applies to those businesses who 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. The employer must have instructed the employee to cease work for a period of at least 7 consecutive days. The employer must again have reached a written agreement with the employee that they have been instructed to and agree to stop working for the minimum 7 consecutive calendar days.