UK government announces Job Support Scheme to protect 'viable jobs'
Published on 24th Sep 2020
The chancellor has announced new measures for employers to support jobs when the Coronavirus Job Retention Scheme (CJRS) ends on 31 October.
The new Job Support Scheme (JSS) which will open on 1 November is intended to support 'viable jobs that create genuine security', recognising that it would be 'fundamentally wrong' to hold people in jobs that only exist with support from the CJRS. This follows on from Tuesday's announcement of further restrictions to combat the rise in COVID-19 infections.
The government has issued a fact sheet setting out the headline points, with further guidance promised.
- The JSS will run from 1 November 2020 to 30 April 2021.
- It is open to all employers, although large businesses will have to meet a financial assessment test which shows that their turnover is lower now than before Covid-19 hit. There is no condition that an employer must have previously accessed the CJRS.
- Employees must be on the payroll on or before 23 September 2020.
- For the first three months of the JSS, employees will need to work a minimum of 33% of their usual hours. The government may increase this threshold after three months.
- During hours worked, an employee will be paid in the normal way by their employer. For every hour not worked, the employer and the government will each pay a third of the employees usual pay. The government contribution is capped at £697.92 per month. The JSS does not cover class 1 employer NICs or pension contributions – these will remain payable by the employer.
- Like the CJRS, the employer will be reimbursed in arrears for the government contribution. Employers make their claims online (from December 2020) and will be paid on a monthly basis.
Employers should note that employees must not be under notice of redundancy whilst receiving support from the JSS – this underlines the change in approach, with the government now focused on supporting jobs that are viable longer term. The government has stated that its expectation is that large employers will not be making capital distributions (including dividends and buy-backs) while using the scheme. The fact sheet also suggests that employers cannot top-up their employees' wages above the two thirds contribution to hours at their own expense.
Employers looking to access the JSS should keep in mind that HMRC will be carefully scrutinising the funds claimed as we are now seeing with claims made under the CJRS. If "found fraudulent or based on incorrect information" grants will need to be repaid.
While we await further guidance, employers can begin considering what support they may need from the JSS; weighing up their future workforce needs and assessing which are 'viable jobs' in the long term, against making more immediate redundancies. Any new short-time working arrangements will need to be agreed with employees and the necessary changes agreed in writing and reflected in employment terms.
The prime minister on Tuesday alluded to the new measures announced being likely to be in place for the next six months; this was more categorically underlined by the chancellor in today's Winter Economy Plan.