COVID-19: Job Support Scheme

29 September 2020

Author: Hannah McGrath
Practice Area: COVID-19 , Employment Law

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The Chancellor has revealed the Job Support Scheme (JSS), a new wage subsidy scheme designed to assist those employers facing lower demand over the winter months due to COVID-19. The focus of the scheme is the preservation of viable jobs.

What is the expected timeframe?

  • The JSS will commence on 1 November 2020 and will continue until April 2021.
  • Eligible employers will be able to make a claim online from December 2020.
  • Payments will be in arrears and on a monthly basis.

Who is eligible?

Employers

  • JSS is open to all small and medium size enterprises (SMEs) with a UK bank account and a UK PAYE scheme without any financial assessment being carried out.
  • “Large Businesses” (with a UK bank account and UK PAYE scheme) will be required to meet a financial assessment test. It is likely that the assessment will be determined on thresholds for turnover, balance sheet total and the average number of employees in a relevant financial period. Further guidance is to be issued shortly but the Government has already stated that it expects large employers to not make capital distributions (such as payment of dividends or share buybacks), while availing of the JSS.
  • The employer does not have to have availed of the Coronavirus Job Retention Scheme.

Employees

  • Employees must be on an employer’s PAYE payroll on or before 23 September 2020.
  • The employee must work at least 33% of their usual hours.
  • After 3 months, the Government will consider whether to increase this minimum hour’s threshold.
  • Employees can rotate on and off the scheme and do not have to be working the same pattern each month (subject to each short-time working arrangement covering a minimum period of seven days).

How does the JSS work?

  • An employee will work 33% of their usual hours paid by their employer. Agreement to short term working must be in writing and must be retained by the employer.
  • The employer and the Government will each pay one third of the employee’s usual pay for the remaining 66% of hours. To be clear this is one third of 66% (i.e. 22% of usual hours) NOT one third of usual hours.
  • The Government contribution is capped at £697.92 per month.
  • Grant payments will be paid to the employer in arrears.
  • The grant will not cover Class 1 employer NICs or pension contributions. These payments will remain payable by the employer.

What are the restrictions?

  • The employee must work at least 33% of their usual hours.
  • Whilst availing of the JSS, an employer must not make an employee redundant or place an employee on notice of redundancy. This is a key difference between the JSS and the CJRS.

If you have any questions on how this change may affect your business or if you want to know more about JSS, please contact a member of the Employment team.

*Please note that this information is for guidance purposes only and does not constitute, nor should be regarded as, a substitute for taking legal advice that is tailored to your particular circumstances.

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