October 29, 2020
New guidance on the scheme explains how businesses that are operating but facing decreased demand can get support for wages through the branch of the scheme known as “JSS Open”. Conversely, businesses that are legally required to close their premises due to national or local Covid-19 restrictions can get support through the second branch, “JSS Closed”.
Employment Law Partner Fflur Jones has set out below what we know about the new scheme:
The JSS Open will provide employers with the option of keeping their employees in employment on shorter hours rather than making them redundant. The employee will need to work a minimum of 20% (no longer 33% as was originally proposed) of their normal hours and the employer will continue to pay them as normal for the hours worked.
Additionally, the employee will receive 66.67% of their normal pay for the hours not worked, made up of contributions from both the employer (5%) and the Government (61.67%). The employee will therefore lose 33.33% of their pay for any unworked hours.
There must be a written agreement between the employer and employee agreeing to the changes.
Employees working a minimum of 20% of their usual hours will therefore receive at least 73% of their normal wages, in circumstances where they earn £3,125 (gross) a month or less.
The JSS Closed will support employers who are legally required to close their premises due to national or local Covid-19 restrictions set by one or more of the four governments in the UK. Each employee who cannot work due to these restrictions will receive two thirds of their normal pay under this scheme, up to a maximum of £2,083.33 per month. However, employers have discretion to top-up the remaining one third of employees’ pay if they wish.
Both branches of the JSS will run from 1 November 2020 for a duration of 6 months, until 30 April 2021 (but with a review after the first three months). Employers will be able to claim from the JSS in arrears from 8 December 2020.
No, neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme in order to benefit from the JSS.
All employers with a UK bank account and UK PAYE scheme will be able to access the Scheme. Additional eligibility criteria will apply depending on whether the employer is claiming a JSS Open grant or JSS Closed grant.
All employees who are placed on the scheme must have been on the employer’s PAYE payroll at some point between 6 April 2019 and 23 September 2020; but can be on any type of contract, including zero hours or temporary contracts.
All small and medium-sized enterprises are eligible for the grant, whereas larger companies with 250 or more employees are only eligible if their turnover has been adversely affected due to the pandemic.
Employers who are entirely publicly funded cannot claim under the JSS, but public sector employers that receive funding at least in part from private sectors may be able to claim if their private funding has been disrupted.
Yes, you can claim the JSS Open and JSS Closed grant at the same time for different employees. However, you cannot claim for a single employee under both schemes at the same time.
No, employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.
Yes. The JSS grant will not cover National Insurance contributions or pension contributions. These contributions remain payable by the employer. Employers must deduct and pay to HMRC income tax and employee National Insurance contributions on the full amount that is paid to the employee, including any amounts subsequently reimbursed by a scheme grant.
Employers will be able to make their first claim from 8 December 2020 on the GOV.UK website, covering salary for pay periods ending and paid in November 2020.
Yes, employers claiming for an employee’s salary under the JSS may still claim the Job Retention Bonus in respect of the same employee provided they are eligible.
Our employment lawyers will be providing updates on the scheme, as and when further guidance is announced.
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