23 Oct 2020 – UPDATED JSS
On 22 October 2020 the Chancellor announced significant amendments to the JSS:
- Employees will now only need to work and be paid normally by their employer for at least 20% of their normal hours, not 33% as originally announced.
- For the remaining unworked hours, the government will provide up to 61.67% of the employee’s normal wages, up to a monthly cap of £1,541.75, not £697.92 as originally announced.
- The employer must pay the employee for 5% of the unworked hours, not 33% as originally announced.
The extended JSS for businesses required to temporarily close their premises is not affected by the 22nd October announcements. Eligibility criteria also remain the same – all SME businesses may use the scheme (irrespective of whether they furloughed employees) and larger businesses will have to prove their turnover reduced during the pandemic and because of it. Eligible employers will still be able to claim the Job Retention Bonus for employees who were previously furloughed and were not made redundant, nor are at risk of redundancy.
These changes effect our earlier article:
05/10/2020 – CJRS Scheme enters final month and a summary of the Job Support Scheme
The Coronavirus Job Retention Scheme, which has been used by 1.2m employers for 9.6m people, has entered its final month. For October the government will underwrite 60% of wages to maximum of £1,875 per month, employers must pay the rest (to 80% of normal basic pay with an optional cap of £2,500 per month) and must pay employers NI and pension contributions due.)
1st October also saw the deadline for employers wishing to start redundancy consultations for 20 – 99 employees if they wish the redundancies to take effect before the CJRS closes on 31st October. For those wishing to make more than 100 redundancies the deadline was mid September, as a minimum 45 day collective consultation duty applies to 100+ redundancy termination proposals at a single establishment.
New Job Support Scheme will be introduced in November – what do we know about it so far?
From November the CJRS will be replaced by the Job Support Scheme, under which an SME employer of an eligible employee who is not under notice of redundancy and who works at least one third of their normal hours, will receive a grant from government equivalent to a half of the time not worked, subject to a cap of £697.92 UPDATED 22ND OCTOBER – SEE ABOVE – NOW £1541.75 per month.
Whilst full guidance is awaited the following are known or anticipated:
- Employers can use the new JSS and claim payments from the Job Retention Bonus Scheme.
- Employees do not have to have been furloughed in order for their employer to benefit from the scheme.
- Employees must have been on payroll with an RTI submission present on or before 23rd September 2020.
- Employees must not be under notice of redundancy.
- Employees must work and be paid ‘normally’ for at least one third of their normal contractual hours. UPDATED 22ND OCTOBER – SEE ABOVE – MINIMUM WORK IS NOW 20%
- ‘Normal’ earnings will follow the CJRS methodology (with variable hours workers pay being determined either by the previous pre Covid-19 P60 , or an actual average if they have not been employed for long enough to have a P60. For fixed hours it is likely that the ‘normal’ pay will again be taken from the year prior to Covid-19.)
- The government and the employer will each meet one third of every normal hour not worked, the government cap for their share is £697.92 per month. UPDATED 22ND OCTOBER – SEE ABOVE – .GOV WILL MEET 61.67%, EMPLOYER 5%
- It seems that employers may not be able to top up their share of the unworked hours (though we’re not sure what the rationale is here, as this is at odds with the CJRS where employers could top up if they chose to.)
- Employers will need to ‘agree’ short time working with staff, issuing amendments to contract in writing. Again this will be easier for those employers who have short time working clauses in their employment contracts. Under CJRS there was considerable debate about what constituted ‘agreement’ with an eventual decision that notification was sufficient (which falls short of an agreement.) In the case of the JSS the factsheet issued by .gov expressly mentions ‘agreement’ which is obviously a higher hurdle – we await full guidance on this point.
- Employees can cycle on and off the scheme and working hours can vary (subject to the required ‘agreement’ being in place) but must work a consistent pattern for a minimum 7 day period.
- The scheme will run November – end April 2021, the government may review the minimum ‘one third of hours to be worked’ rule with a view to increasing the minimum threshold. UPDATED 22ND OCTOBER – SEE ABOVE – MINIMUM THRESHOLD NOW REDUCED TO 20%
- Claims can be made monthly from December in a similar way to the CJRS claims were.
The above is for general information only and subject to publication of full .gov guidance.
The .gov factsheet gives an example employee Beth, who normally works 5 days for £350 per week. Her employer engages her for 40% of her normal hours, paying her £140, £210 short of her normal weekly earnings. Her employer will pay one third of the short fall (£70) and the government will pay a further third (£70) meaning that she earns £280 for the week, 80% of her normal earnings. The total cost to the employer is £210 (plus, we suppose, employment costs.) UPDATED 22ND OCTOBER , EXAMPLE NO LONGER CORRECT – SEE ABOVE.