New Job Support Scheme (JSS) – What You Need to Know?
Following the Chancellor Rishi Sunak’s announcement last Thursday regarding the New ‘Job Support Scheme’, the teams at Tollers have been busy dealing with all your queries and helping to clarify the numerous questions that have arisen as a result of the announcement. We have outlined below the answers to the main questions we are being asked.
When does the JSS start?
The JSS starts on 1st November 2020 and will run for 6 months. It is intended to commence once the Coronavirus Job Retention Scheme (CJRS) concludes on 31st October 2020.
Which companies are eligible?
The JSS is open to all employers, with a UK bank account and UK PAYE schemes. This is regardless of whether or not the employer, or the employee have previously taken advantage of the CJRS.
However, large businesses will need to meet a financial assessment test. As such, the scheme is only open to those companies whose turnover is lower now than it was before they started experiencing problems arising from Covid-19. Small and medium enterprises (SMEs) will not have a financial assessment.
Large employers who qualify for the JSS will be expected not to make capital distributions, such as dividend payments or share buybacks, whilst using the scheme.
Which employees are eligible?
The JSS applies to all employees, even if they have not been previously “furloughed” under the CJRS. However:
- They must be in viable employment from 1st November 2020;
- No redundancy notice can be served on them whilst they are being paid under the JSS;
- They must have been on the employer’s Real Time Information (RTI) submission to HMRC on or before 23 September 2020;
- To show that the work is viable, employees must work at least 33% of their “normal hours” (this may be increased after 3 months of the JSS being in place).
What are “normal hours”?
For furloughed staff, this is the actual or usual hours they worked pre-Furlough.
For non- furloughed staff, this the hours that they usually work, either over an average period if they don’t work fixed hours, or on their actual fixed hours if they do.
The average hours are calculated in the same way as they were under the CJRS, but more details should follow.
Can employees work for more than 33% of their normal hours?
They can. In order to qualify an employee has to work a minimum of 33% of their normal hours. There is no maximum reported as the scheme is designed to apply to employees whose employers only require them to work lesser hours due to companies facing a lower demand as result of Covid-19. More details will follow.
How long should the working pattern last?
The working patterns can vary and employees can come off and on the scheme. However, each pattern of short term working (of at least 33% of the employee’s normal hours) must be over at least a 7 day period.
Who pays what under the JSS?
The employer will pay for the hours worked by the employee at their normal contractual rate. To qualify the hours worked must be at least 33% of their normal working hours. The remaining unworked hours are accounted for as follows:
The Government will pay 33% of the value of the employee’s unworked normal hours up to a maximum of £697.92 per month. The employer will also pay 33% of the value of the employee’s unworked normal hours but with no cap. The final 33% of the employee’s unworked hours remain unpaid.
This means that in cases where the employee is only required to work 33% of their normal hours, the employee will still receive at least 77% of their normal pay (save for in cases where the cap on Government’s contribution is applied). That will equate to the employer paying 55% of the value of an employee’s normal hours and the Government paying 22% (although capped at £697.92 per month).
Where the employee’s hours worked are more than 33% but are still less than their normal hours the calculation is the same. The employer will pay for the hours worked with any unworked hours still being split as 33% Government, 33% Employer and 33% unpaid.
The implementation of this scheme will amount to a reduction in pay and in some cases, a change to an employee’s normal working hours. As such, employees should consent to be paid and employed under the terms of the JSS.
Will NI and pension contributions be paid?
Unlike the first few months of the CJRS, the Government will not pay for Class 1 employer NIC or pension contributions. These remain payable by the employer.
Will notice pay be recoverable under the JSS?
This is a scheme designed to support the jobs of staff who are in employment with viable jobs. Unlike with the CJRS, which was designed to keep people employed when there was no work to do, the JSS is designed for staff not at risk of redundancy. As such the Government will not cover any contractual notice payments.
Can the Job Retention Bonus still be claimed if the employees are being paid under the JSS?
Yes. The two schemes are intended to work alongside each other. The Job Retention Bonus is payable to any previously furloughed employee, who remains employed until 31st January 2021. Both schemes are intended to support existing and viable jobs.
How will the grant under the JSS be paid?
The payments will be made in arrears following a claim for a given pay period, after an RTI submission to the HMRC. Payments will be made monthly and the HMRC will check claims. The grants can be used to reimburse wages already paid.
If you have a question or would like to understand the implications of the scheme for your business and/or employees…Talk to Tollers on 01604 258558. Our Employment team and Commercial teams are on hand to assist you with all you need to know.