Update to the Job Support Scheme for Employers - Are you eligible?
When the Coronavirus Job Support Scheme was first announced, to participate employers were asked to pay a third of their employees’ wages for hours not worked to be eligible for grant funding from the government to cover a third of their staff’s wages.
Now that the Coronavirus Job Retention Scheme or furlough scheme has less than a week to go and in light of increased restrictions for businesses, the Job Support Scheme funding and eligibility has changed to help more businesses retain staff.
The changes for increased funding are in place from 1st November to the end of April 2021, with the government reviewing funding amounts in January.
What are the changes?
For those businesses who have to close due to local or regional restrictions can apply for the Job Support Scheme, even if they did not make use of the furlough scheme and government will cover the full cost of 2/3 of employees’ salaries, who can’t work for a week or more
Businesses that can still open but are still hugely affected by current covid-19 environment, will see a change to their The Job Support Scheme claims to keep staff on rather than make them redundant
Originally the scheme required staff to work 33% of their usual hours to receive the grant funding, now they only need to work 20% of hours
Originally employers contribution to keep staff on part time and pay 33% of their salaries, now only pay 5% of the total 2/3 of wages received by an employee
Employers facing decreased demand - the JSS Open Scheme
Recognising the evolving situation with the pandemic and health restrictions, and the pressures employers are facing this winter, the government has announced that it will increase the scale of support available to employers through JSS Open above what was initially announced, in order to protect more jobs:
The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.
Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked - this will be made up of contributions from the employer and from the government.
The employer will pay 5% for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish.
The government will pay the remainder of 61.67%, of salary for the hours not worked, up to a maximum of £1,541.75 per month.
This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Employers forced to legally close their businesses - the JSS Closed Scheme
If you are an employer and have been legally required to close your business as a direct result of coronavirus restrictions you can apply for this funding, the JSS Closed Scheme:
The funding is to help with wages for staff who you would like to keep on payroll but who cannot work due to the restrictions.
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish .
Employees may also be entitled to additional financial support, including Universal Credit.
Who can make a claim
Employers will be able to access the Job Support Scheme if:
they have enrolled employees on payroll between 6 April 2019 and 11:59pm on 23 September 2020.
Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them.
Employees will be able to undertake training voluntarily in non-working hours. Where time spent on training attracts a minimum wage entitlement in excess of the grant payment, employers will need to pay the additional wages
Employees whose hours reduce due to the COVID-19 pandemic will continue to have access to Working Tax Credit and its childcare element for the duration of the JSS scheme.
Employees can be on any type of contract, including zero hours or temporary contracts.
Agency workers are regarded as employees of an employment agency for the purposes of this scheme, provided they are employees for Income Tax purposes.
Employees do not need to have been furloughed under the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
Employers will be able to top up employee wages above the level of minimum contributions at their own expense if they wish.
Employers cannot claim both JSS Open and JSS Closed in respect of a single employee for the same day.
Employers have a UK, Channel Island or Isle of Man bank account
Additional eligibility criteria will apply depending on whether the employer is claiming a JSS Open grant or JSS Closed grant. Further guidance will be released at the end of October.
Next steps
To be eligible for the grant, employers must have reached written agreement with their employee (or reached written collective agreement with a trade union where the relevant terms are determined by collective agreement) that they have been offered a temporary working agreement. The agreement must be available for view by HMRC on request.
This temporary working agreement must cover at least seven consecutive days.
Employers should discuss with their staff and make any changes to their employment contract by written agreement. When employers are making decisions, including deciding to whom they should offer reduced hours, equality and discrimination laws will apply in the usual way.
Employers must maintain records relating to the terms of the temporary working agreements for each employee, and:
make sure that the agreement is consistent with employment, equality and discrimination laws
keep a written record of the agreement for 5 years
keep records of how many hours employees work and the number of usual hours they are not working
this agreement must be made available to HMRC on request
HMRC will publish further guidance on what to include in the written agreement by the end of October.
We will keep you updated here as further guidance is released or please get in touch for any questions.
