As the end of Furlough approaches following the initial announcement of the Job Support Scheme (JSS) which is due to begin on 1 November 2020 the Chancellor has now announced an amendment to the scheme.
When originally announced, the JSS required employees to work a minimum of 33% of their normal hours. This has now been reduced to 20%, meaning that employees working as little as one day a week are now eligible for the scheme.
Additionally, the employer contribution to the ‘unworked’ hours has been significantly reduced from 33% to just 5%. These changes are being made with a view to enabling businesses to retain staff and avoid redundancies.
Example: “If someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.”
Employers will continue to receive the £1,000 Job Retention Bonus.
No changes have been made to the JSS for those businesses legally required to close.
There has been no change to the eligibility requirement for the JSS, such that all small and medium sized businesses will be eligible. Larger businesses are only eligible if their turnover has fallen during the pandemic. Eligible employers will be able to claim under both the JSS and the Job Retention Bonus (for employees who have previously been furloughed).
The JSS Closed refers to businesses that are required to close due to local restrictions.
Under JSS Open, an employee will need to work at least 20% (no longer 33%) of their normal hours. They will receive normal pay for the hours they work, and two-thirds of pay (subject to a cap which bites against those earning more than £3,125 a month) for the hours they do not work. For that two-thirds top-up, the government will pay 61.67% and the employer will pay 5%, plus NI and pension contributions on the full amount. That is a significant change from the previous 50:50 split towards the two-thirds top-up, shifting the financial cost overwhelmingly to the public purse. There must be a written agreement between employer and employee, agreeing to the changes.
Under JSS Closed, the position remains that the employee will receive two-thirds of their normal wages, funded by the government (again, with a cap biting against those who earn more than £3,125pm). The employer will have to pay the NI and pension contributions on that amount. Again, there must be a written agreement between employer and employee, agreeing to the changes.
We have a suite of standard documents and policies available to ensure that you are legally compliant when using the scheme.
Please contact our employment team if you require any further information or advice on email@example.com.