A policy paper has been published by HMRC, which provides further details of the Job Support Scheme which comes into force when the current furlough scheme ends this month. The Job Support Scheme was originally intended to benefit employees who were working at least one-third of their normal hours (though this has now changed – see below), and was subsequently extended to also provide support for businesses who are forced to close as a result of Government-imposed restrictions. The two schemes are now being termed JSS Open and JSS Closed.
The policy paper also seems to show some changes to the details of the scheme which had previously been announced.
Under the JSS Open scheme, an employee will need to work at least 20% (previously this was 33%). The employee will then receive 66.67% of their normal pay for the hours not worked. Of this, the employer must contribute 5% and the Government will make up the remaining 61.67%. Again, this is a change from the scheme as previously announced – which required employers to match Government contributions for the hours not worked.
As with the furlough scheme, the payments are subject to a cap which applies to employees earning more than £3,125 a month (or £37,500 per annum).
Employers have a discretion to ‘top up’ employees’ pay. This is a change from the scheme previously announced in which the Government stated that they ‘did not anticipate’ employers being able to top up. Presumably, by this the Government meant that they would not expect employers to use this scheme if their financial position was such that they could afford to top up – following criticism of businesses using the furlough scheme when their financial position did not require it.
Under the JSS Closed, the employee will receive two-thirds of their normal wages. However, unlike the JSS Open, this is funded entirely by the Government. It is again, subject to the £3,125 monthly earnings cap. Employers do not need to contribute to wages but are responsible for pension contributions and National Insurance on the amount being paid by the Government.
As with the JSS Open, employers may top up employees’ wages if they wish to.
General criteria – Applicable to the JSS Open and the JSS Closed
Employers will be able to access the Job Support Scheme if they have enrolled for PAYE online AND they have a UK, Channel Island or Isle of Man bank account.
Organisations that have staff costs that are fully publicly funded should not use the Job Support Scheme.
A notable change from the furlough scheme is that employees must not be on notice of dismissal (including for redundancy) whilst the grant is being claimed.
There must be a written agreement showing the change to terms and conditions between employee and employer. This is the Government’s attempt to crack down on fraudulent claims and therefore we would suggest it is best practice (though not required) to have employees sign and return the agreement as evidence that it was agreed, as opposed to a letter confirming an oral agreement.
Both schemes are open to small and medium-sized businesses, meaning those with fewer than 250 employees on 23 September 2020.
Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE 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 September 2020 and were subsequently rehired, then employers can claim for them.
On either scheme, the employer remains responsible for paying pension contributions and National Insurance Contributions.
JSS Open – Eligibility Criteria
As above, the JSS Open is available to all small to medium employers. Larger employers with 250 or more employees across their payrolls on 23 September 2020, need to complete a Financial Impact Test to evidence that their income has been impacted due to coronavirus.
Employees can undertake training whilst on the JSS Open scheme. For training undertaken during work hours, this time counts toward the 20% of ‘working time’. For training undertaken outside of working hours, this must be done voluntarily and does not count as working time. However, if the employee is receiving less than minimum wage whilst on the JSS, the employer will need to top up the pay so the employee receives minimum wage.
A record of the agreement between employee and employer must be kept, as well as a record of hours worked.
JSS Closed – Eligibility Criteria
The JSS Closed is aimed at employers who are forced to close by Government restrictions. Employees must cease working for a minimum of 7 calendar days in order to qualify. A full list of qualifying requirements is expected to be published at the end of the month.
Notably, the JSS Closed does not apply to employers who choose to close because, for example, increased restrictions have led to a downturn in business, or businesses who are instructed to close as a result of a workplace-specific outbreak. However, it does include premises restricted to delivery or collection only services from their premises and those restricted to provision of food and/ or drink outdoors.
Overall the two schemes have undergone some significant changes since they were first announced at the end of September. Employers must ensure that they, and their employees, are eligible to make claims under the schemes, or risk potential penalties from the Government. Further scheme details are expected at the end of October, and we will aim to keep you informed of changes and updates.