Job Support Scheme
To say that businesses have faced challenging times in the last few months is a vast understatement. This MLP newsletter aims to summarise the financial support for employers that has been made available until now and going forward, with key dates for your business calendar.
The Job Support Scheme (JSS) is the less generous follow up to the CJRS, due to be available from 1 November 2020 for 6 months with a review in January 2021. More details are due to be made available by HMRC but here is what we know at the moment.
Job Support Scheme – Open (for businesses that remain open but face reduced demand)
Here, the employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government. The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Job Support Scheme – Closed (for businesses that have been forced to close)
Where employers have been legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK, the ‘JSS Closed’ is available.
This includes premises restricted to delivery or collection only services from their premises and those restricted to provision of food and/ or drink outdoors.
Businesses premises required to close by local public health authorities as a result of specific workplace outbreaks are not eligible for this scheme.
Employers are only eligible to claim for periods during which the relevant coronavirus restrictions are in place. Employers will not be able to claim JSS Closed to cover periods after restrictions have lifted and the business premises is legally allowed to reopen. They may then be able to claim JSS Open if they are eligible.
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.
Financial Impact test for large employers claiming JSS Open
Large employers claiming JSS Open, defined here as a legal entity 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. If the employer’s turnover has remained equal or has decreased compared to the previous year, then they will qualify. This test only needs to be taken once before the employers first claim for the Job Support Scheme. For more information, contact the employment law team at MLP.
It should be noted that, as with furloughed employees, you must obtain written consent from employees who are placed within either the JSS Open or Closed, as a temporary amendment to their terms of employment.
Job Retention Bonus
Employers can claim the Job Retention Bonus (JRB) from 15 February 2021 through the Government’s online claim service on GOV.UK.
The JRB is a £1,000 one-off taxable payment to employers, for each eligible employee that the employer furloughed through the CJRS and kept continuously employed until 31 January 2021.
Employers will be able to claim the bonus between 15 February 2021 and 31 March 2021. Employers do not have to pay this money to the employee.
It is useful to note that employers may be eligible to claim the JRB for employees of a previous business who have been transferred under the TUPE rules.
Furlough and Flexible Furlough – A Recap
Prior to 1 November 2020, employers were able to furlough employees through the Coronavirus Job Retention Scheme (CJRS), which was in its original form from 19 March 2020. Under the original CJRS, employers could claim 80% of their employees’ wages (capped at £2,500), although furloughed employees were not to undertake any work for the employer whilst furloughed. There was no obligation for employers to ‘top up’ employees’ wages, although furloughed employees were entitled to receive 100% of their usual salary during any period of annual leave of during their notice period.
On 1 August 2020, however, the government introduced flexible furlough, allowing furloughed employees to work some of their hours and be furloughed for the remainder. The amount of the contribution required by the employer also increased. Employers had to continue to pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they were furloughed. At this point, however, employers had to pay Class 1 employer National Insurance contributions (NIC) and pension contributions.
From 1 September 2020, the government grant towards the employee wages reduced to 70%, meaning employers were required to contribute at least a 10% ‘top up’ to wages, together with NIC and pension contributions.
From 1 October 2020, the government grant reduced again to 60%. This means that employers accessing the CJRS must now contribute at least 20% towards furloughed employees’ wages, in addition to NIC and pension contributions.
30 November 2020 is the last day you can submit claims for periods ending on or before 31 October 2020. After these date employers will not be able to submit any further claims under the CJRS or add to existing claims, regarding furloughed employees.
It may be that in some instances none of the support measures can assist your business and, instead, you will require to make redundancies. If that is the case, please contact the team at MLP, who can not only guide you through the correct legal procedure but can also assist with the related documentation, such as letters to employees warning them that they are now ‘at risk’ of redundancy.
Please don’t hesitate to contact the MLP Employment team for detailed advice on any of the issues raised. You can reach us at firstname.lastname@example.org or @HRHeroUK or on 0161 926 9969.