Information (made simple) regarding the JSS.
The Scheme is designed to protect jobs in businesses who are facing closure or a lower demand over the winter months due to COVID-19.
If you are feeling a little overwhelmed with the volume of changes and guidelines the Government have introduced, changed and re-introduced, fear not – below we have provided some simple guidelines:
What if I have to close my business over the winter months or over a period of time because of local or national COVID restrictions?
The Government will pay two-thirds of your employees’ salaries up to a maximum of £2,083.33 a month for those employees who cannot work. This is called JSS Closed and further details will be announced by the end of October 2020.
What if my business is not legally required to close, but have a reduced turnover due to the difficulties from COVID-19.
The Government will assist in paying your employees for any hours not worked. This is called JSS Open and will give businesses the option of keeping their employees in a job on shorter hours rather than making them redundant.
Businesses will be expected to continue to pay employee(s) for their time worked (a minimum of 20% for their usual hours). 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 the government.
Following the announcement from the Chancellor on 22nd October, the employer will pay 5% of the employees salary for the hours not worked, up to a maximum of £125 per month. Please be aware, the scheme will not cover Class 1 employer National Insurance Contributions or pension contributions, as these contributions will remain payable by the employer.
The government will pay the remainder of 61.67%, of the employee’s 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.
A quick example below:
Sandra works (usually) 5 days a week and is paid £600 per week. The company has a reduce sales due to COVID. It has been agreed that she would reduce her hours of to one day a week under the scheme (the minimum 20% required), her weekly pay will be:
- £120 paid by the employer for the hours worked (20%);
- £24 paid by the employer, ie 5% of £480, the usual pay for the hours not worked; and
- £296.02 contributed by the Government, ie 61.67% of £480, the usual pay for the hours not worked.
- Sandra will receive £440.02 in total.
As a further example,
Tom usually works 3 days a week and is paid £300 per week; his hours are reduced to one day a week under the scheme, his weekly pay will be:
- £100 paid by the employer for the hours worked;
- £10 paid by the employer, ie 5% of £200, the usual pay for the hours not worked; and
- £123.34 contributed by the Government, ie 61.67% of £200, the usual pay for the hours not worked.
- Tom will receive £233.34 in total.
How Long will the Scheme last?
The JSS will begin on the 1 November 2020 and will run for a period of six months, until 30 April 2021. The government will review the terms of the scheme in January.
Eligibility for JJS Open and JSS Closed
Businesses will be able to claim for employees who were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020.
Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them.
Larger employers (employers with 250 or more employees as of 23rd September) will have to undertake a financial assessment test to determine whether they are eligible for assistance. However, there will be no financial assessment for small and medium-sized enterprises (less than 250 employees as of 23rd September 2020).
How do I implement the JSS (Open or Closed)
As with the Job Retention Scheme, you must gain agreement with your employees, in writing as a temporary change to their contract of employment. You must retain the paperwork for 5 years
As with previous Scheme, further guidance on the steps that employers need to take to calculate and make a claim to the Job Support Scheme will be published by the end of October – watch this space! As soon as we know more, a further update will be available.
As always, if you would like further support please contact us, we would love to say HELLO