Job Support Scheme (JSS) – brief summary

We all knew that the Coronavirus job retention scheme (CJRS) would not last forever. In fact, it will end on 31 October 2020. Due to the continued pressure on the UK economy wrought about by the pandemic, Chancellor Rishi Sunak set out the Government’s new job support scheme (JSS) in a statement to the House of Commons on 24 September 2020.

The JSS will begin on 1 November 2020 and effectively subsidises the wages of employees working at least one-third of their normal hours. However, the focus has shifted. The aim of JSS is to preserve ‘viable jobs’ in those businesses facing lower demand over the coming winter months due to the coronavirus pandemic (able to support their employees doing some work, but that need more time for demand to recover), but in doing so it is less generous than the CJRS. Essentially:

1. Operation of JSS

The Government’s JSS will begin on 1 November 2020 and run for a period of six months, until April 2021.

2. Key elements of JSS

The JSS will work to bolster the pay of those employees working reduced hours, as follows:

• eligible employees work at least one third of their normal hours and are paid by the employer, accordingly; then
• Government and the employer together will make up the pay to two-thirds of normal hours, with the Government and the employer each paying one third of the remaining unworked hours (subject to a cap on the Government contribution);
• the Government contribution will be capped at £697.92 per month – which will ensure employees earn a minimum of 77% of their normal wages as long as the government contribution has not reached the cap;
• eligibility for employers is not dependent on having previously used the CJRS;
• the JSS grant will not cover Class I employer NICs or pension contributions, which remain payable by the relevant employer;
• unlike the CJRS, the JSS, according to its Factsheet, states that the Government “expectation is that employers cannot top up their employees’ wages above the two thirds contribution to hours not worked at their own expense” – though I would be surprised if to do so would be a legal bar;
• the relevant employer will be reimbursed in arrears for the Government contribution
• employers will be able to make a claim from December 2020 and grants will be paid on a monthly basis, effectively after payment to the employee has been made and that payment has been reported to HMRC via an RTI return. So, grants can only be used as reimbursement for wage costs actually incurred.

3. Eligibility

Employers

• all employers with a UK bank account and UK PAYE scheme
• all small and medium employers without any financial assessment requirement;
• large employers will only be eligible where their turnover has fallen during the covid 19 crisis and then only after the results of the financial assessment test

Employees (which probably means workers too)

• must have been on the employer’s PAYE payroll on or before 23 September 2020 (essentially a real-time information (RTI) admission, notifying payment to that employee, must have been made on before 23 September 2022 HMRC);
• relevant employees must be working at least 33% of the usual hours, a threshold which will be reviewed by the Government after three months;
• employees do not have to work the same pattern each month, but each short time working arrangement must cover a minimum period of 7 days;
• cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming JSS for that employee – a key difference to the CJRS.

Whilst welcome, at least to the extent that there is something else for employers, in terms of support, the shadow of redundancies will still loom large over many businesses, and JSS does not replace that, unless of course redundancy costs are similar to, or would be more than the amount that the relevant employer would need to pay under JSS.

There are other issues of course, not least that there remain many employees in a wide variety of businesses who are reluctant to return to the workplace. If they cannot work from home then they will need to work at least 33% of the usual hours to the workplace in order to be put on the JSS, which in turn will lead to the same sort of arguments that existed with CJRS.

Clearly, a number of details still need to be ironed out, but those employers wishing to take advantage of JSS will need to start taking steps sooner rather than later, as the scheme comes into operation in a little over a month’s time.