The “Job Support Scheme” (“JSS”) is being introduced by the Government as a replacement for the Coronavirus Job Retention Scheme (CJRS) furlough scheme which ends on 31 October 2020. The somewhat limited guidance provided by the government as at 24 September 2020 is available here.
Detailed guidance from HMRC/ the government on how the JSS scheme will operate has not been published to date. A Treasury Direction is expected to be published in due course.
The JSS is only available to small or medium sized employers (SME’s) although some large employers may be able to utilise the JSS subject to financial assessment. There is no financial assessment test for SME’s.
The JSS replaces the CJRS furlough scheme from 1 November 2020. It is our understanding that the basic premise is that under the scheme an employee will be required to work at least 33% of their normal hours (the minimum working hours), and that the remaining unworked period will be paid as follows:
- one third by the government (subject to a cap of £697.92 per month)
- one third by the employer
- the employee would forego one third
The scheme is open to all employees, not just those who have previously been furloughed. The number of hours that staff would work under the job support scheme would be decided in consultation with the employer subject to the current 33% minimum working hours and could vary from time to time.
Employees will be able to ‘cycle on and off the scheme’ and will not have to work the same pattern each month, but each JSS short-time working arrangement must cover at least seven days.
The benefit to the employee of the scheme is that whilst they will work less hours, they will be paid for two thirds of the unworked period subject to the government cap. The benefit to the employer is that it provides support to them to retain staff during a temporary downturn due to Covid-19 and to pay less than the normal contractual pay for the employee.
The government’s fact sheet on the scheme gives the following example:
- Beth normally works 5 days a week and earns £350 a week. Her company is suffering reduced sales due to coronavirus. Rather than making Beth redundant, the company puts Beth on the Job Support Scheme, working 2 days a week (40% of her usual hours).
- Her employer pays Beth £140 for the days she works (£350/5 x 2).
- For the time she is not working (3 days, which equates to £210), she will earn 2/3 of this i.e. £140 (2 thirds of £210), bringing her total earnings to £280 which equates to 80% of her normal wage.
- The Government will give a grant worth £70 (1/3 of hours not worked) to Beth’s employer to support them in keeping Beth’s job.
The government’s contribution has a cap of £697.92 per month.
The JSS is currently expected to end at the end of April 2021, and this is therefore a temporary scheme. The minimum working hours threshold of 33% is due to be reviewed and may be increased by the government from February 2021.
The JSS cannot be used for any period where an employee is on notice of redundancy.
The government fact sheet states that employers “must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing”. It is assumed that this means that an agreement to document the JSS arrangement will need to be entered into before the beginning of the period to which the JSS claim relates, and be made in writing or confirmed in writing by the employer.
Please note, all advice and opinion offered in this article are subject to change in line with the latest government advice.