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Job Support Scheme - JSS Open JSS Closed - Lighter HR

On Thursday 24th September 2020, the Chancellor, Rishi Sunak, announced a new scheme to support employees and employers when the current Coronavirus Job Retention Scheme comes to an end on 31st October 2020.  The new scheme is known as the Job Support Scheme (JSS). 

There was then a further announcement regarding an extension to the scheme on Friday 9th October 2020.  The extension gives further financial support to businesses who are required to shut due to local Covid restrictions. There was then a further announcement on 22nd October 2020 that fundamentally changes the scheme and makes it far more attractive to employers.

The purpose of this post is to give you some additional information on what the Job Support Scheme is and how you use it.

We strongly advise you get in-touch with us on 0203 319 1649 to get expert, tailored guidance before you take any actions.

What is the Job Support Scheme?

The Job Support Scheme (JSS) replaces the Coronavirus Job Retention Scheme (CJRS) which comes to an end on 31st October 2020.  The Job Support Scheme runs for 6 months from 1st November 2020. The scheme is now made up of two different levels of support:

  • JSS Open is there to support businesses who can remain open but who are facing decreased demand due to Covid, and
  • JSS Closed is for those business who are required by law to close due to Covid.

What support is available under JSS Open?

Originally under the scheme, an employee was required to work at least 33% of their contracted hours.  The employer would pay for those hours worked and would also be responsible for paying 33% of the unworked hours.  The government would then pay 33% of the unworked hours and the employee would not be paid for the remaining 33% of the unworked hours.

On 22nd October 2020 significant changes were announced.  The scheme is now as follows:

  • The employee is required to work a minimum of 20% of their contracted hours and the employer is responsible for paying the wages for these hours worked.
  • The employee then receives 66% of their normal pay for the hours that they don’t work.
    • Of this amount, the employer pays 5% up to a maximum of £125 per month with the discretion to pay more than the cap if they wish.
    • The government will pay the remaining 61.67% of the hours not worked up to a maximum of £1,541.75 per month.
  • This means that, where an employee earns £3,125 a month or less they will receive 73% of their normal wages.

Note: These calculations are indicative. The government will be releasing full details of sample calculations at the end of October 2020; we will provide an update when they do.

What support is available under JSS Closed?

In addition to the basic scheme set out above, the Chancellor announced an extension to the scheme.  The extension is designed to support those businesses who are legally required to close due to national or local Coronavirus restrictions. 

In a situation where a business is legally required to close, the government will pay up to two thirds of employees’ salaries, up to a maximum of £2,083.33 a month. The employer is only required to pay the National Insurance and pension contributions.

This extension only applies to sectors that are required to close under Coronavirus restrictions (think nightclubs, restaurants and bars if local restrictions apply).  It does not cover businesses who develop an outbreak on premises and are instructed to close temporarily by the local health authority.

Note: Again, like JSS Open, these calculations are indicative. The government will be releasing full details of sample calculations at the end of October 2020; we will provide an update when they do.

Who is eligible for the JSS?

For a business to be able to make a claim under the JSS you must have eligible employees, a UK bank account, and a UK PAYE scheme. 

Eligible employees are those that were on your payroll as at 23rd September 2020 (they need to have actually appeared on a payroll submission before this date so if you pay monthly, most likely individuals will have joined your company at some point in August and have appeared on your August payroll submissions).

In addition to the above, if you are a large company then you must be able to pass a financial impact test which demonstrates that your business has suffered financial detriment due to Coronavirus; as an SME this does not apply. 

It is yet to be officially confirmed what the definition of an SME will be under the scheme, but it is assumed that it will be aligned to the definition in the Companies Act 2006 which states that an SME has to meet two of following criteria:

  • Have an annual turnover of £36million or below;
  • Have a balance sheet total of £18million or below;
  • Have 250 or fewer employee.

You don’t have to have made a claim under the CJRS in order to be able to use the JSS.  In addition, the employees that you put on the JSS don’t have to be employees for whom you have made a claim under the CJRS.

Can I just place an employee on the Job Support Scheme?

No.  In order to place an employee on the JSS you are placing them on short-time working and you need their consent in order to do this.  It may be slightly easier for you if you have a short-time working clause in your contract but regardless, you should still go through a consultation process.

You also need to ensure that the way in which you select the people to place on the JSS is fair otherwise you could find yourself dealing with many discrimination claims. 

Our recommendation is that you approach this in a similar way to how you would approach a redundancy situation.

You should:

  • Review your business and determine which roles need to be placed onto the JSS.
  • Begin consultation. In an ideal world, you would sit all impacted individuals down and ask for volunteers in the first instance.  You may well have individuals who would be more than happy to be placed on the JSS and if you can achieve your cost savings this way then it will be the easiest approach.
  • If you can’t get the volunteers or if this approach simply wouldn’t work for your business due to your structure and individual skill sets, then you should explain to the selected individuals how they have been selected and we’d recommend giving them the opportunity to challenge that selection.
  • Having completed the consultation process, the hope is that you will have the consent of the individuals to place them on the JSS.
  • You need to then write to them to confirm the changes to their contract of employment and this written agreement will need to be available to HMRC on request.

What if someone refuses to go on the Job Support Scheme?

It’s for this reason that we’re recommending a consultation process as, if someone refuses to go on the JSS, it’s likely that the alternative for them will be redundancy and, if an individual has more than 2 years’ service, you will need to ensure that the redundancy process is entirely fair so as to avoid unfair dismissal claims.

If you find yourself in a situation where you can’t reach an agreement with an employee, seek help.  You’ll need to run a redundancy process, but it will be very important that this redundancy process includes all individuals who would be placed in the pool in a normal redundancy situation.  You cannot target just the person who has refused to go on the JSS.

In the current market, if you manage the communication correctly, it’s unlikely that people will refuse to be placed on the scheme, but we cannot stress enough the importance of approaching this situation with caution.  There is no case law as yet to determine how the treatment of all of these issues will be ruled in an Employment Tribunal so demonstrating that you were fair in your treatment of employees, employed best endeavours to follow an acceptable approach to managing the situation and keeping documentation that supports all that you do will be incredibly important.

What happens with employee’s holiday if they go on JSS?

At the moment, we don’t know the answer to this question.  It’s clear that employees would accrue holiday for the hours that they work i.e. if an employee is working 40% of the time then they will accrue 40% of their holiday entitlement.  However, whether employees also accrue holiday for the unworked hours has yet to be commented on.  Our assumption would be that they will not but, given that employees did continue to accrue holiday whilst furloughed, it’s possible that a different approach will be taken.  We’ll update you when we know more.

Can I make people redundant whilst they are on the JSS?

Yes and no! 

Yes, in that you can carry out a redundancy consultation process with employees who are on the JSS.  No, in that you cannot have people working notice whilst on the JSS.  So, you could conduct and complete the redundancy consultation process whilst an employee is on the JSS but the date on which it concludes and on which you serve notice will be the date on which the employee needs to be removed from the JSS and you will be required to cover the full cost of their notice pay.

You can find out more about how we can help you manage redundancies on our Redundancy Support page.

We have also written a guide to redundancies which you can find here:

How To Make Someone Redundant - Lighter HR

If you’d like help with the Job Support Scheme or other Coronavirus matters, contact us on 0203 319 1649 or fill in the form below.

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Employee Issues? | Our Expert HR Consultants Can Help You | Lighter HR

If you’d like help with the Job Support Scheme or other Coronavirus matters, contact us on 0203 319 1649 or fill in the form below.

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