Effective from 1st November 2020, the Job Support Scheme will ensure financial security through the coming winter months. The scheme will cover salary/wages for pay periods ending and paid in November. However, claims cannot be submitted until after 8th December. Subsequent months will follow a similar pattern, with the final claims for April being made from early May.
Employees will now receive at least 66.67% of their normal pay for the hours not worked, made up of contributions from both the employer and from the government.
The new Job Support Scheme (JSS) is divided into two elements: JSS Open and JSS Closed. What does this mean, and what category do I fall under?
This is available for employers who are experiencing decreased demand due to Covid-19, but which remain open. Employees 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 they have worked.
How it works:
- Employees need to work a minimum of 20% of their normal hours, paid at their usual rate by the employer
- Initially, the employer will pay 66.67% of the employee’s hours that they have not worked, but that they would have otherwise worked without Covid-19
- The government will refund the remaining 61.67% of the employee salary, a maximum of £1,541.75 per month
- Therefore, the employer will pay 5% (the difference between 66.67-61.67%) of the employee’s salary for hours not worked – up to a maximum of £125 per month
- The employee will therefore earn at least 73% of their normal pay (please see below table for explanation)
|Example||Employee A earns £1000 per month|
|Normal Hours (Outside Covid-19 Conditions)||£1,000|
|Works 20% of Normal Hours||£200|
|Hours Not Worked||£800|
|5% of Salary Not Worked||£40|
|Government Refunds 61.67%||£493|
Please note the employer pays the initial sum (in our example this would be £733), and the government amount of 61.67% (£493) will be refunded to the employer in the following month.
*The total pay is subject to the usual deductions.
Be aware that employers cannot enter into any commitment or transaction with the employee which would reduce wages below the amount claimed.
Temporary Working Agreement
A temporary working agreement must be made in writing and given to the employee. The temporary working agreement must cover at least 7 consecutive days.
If we process your payroll, you will need to provide us with a scanned copy of the agreement at the time of signing; this will allow us to make the necessary calculations before running your payroll. We will confirm receipt of these within 2 working days.
Delays in providing this information could cause delays in the processing of your payroll due to increased calculations needed. Templates are available from us upon request, just get in touch to request one.
This scheme is for employers whose business premises at one or more locations has been legally required to close as a direct impact of coronavirus (for a minimum of 7 consecutive days). This includes premises which have since been restricted to delivery or collection only, as well as establishments which can only serve food and drinks outdoors. It is important to note that employers will only be eligible to claim for periods where coronavirus restrictions are put into place by the government.
For example, if your business must temporarily close because it is in an area of Tier 3 lockdown, or because it is a restaurant which can only operate via a delivery service, it will be eligible for JSS Closed. However, if a business closes for reasons outside of government legislation, such as an outbreak within the business, they will not be eligible. Once a business can legally reopen after claiming JSS Closed, they may become eligible for JSS Open.
A business may claim both JSS Open and JSS Closed simultaneously for separate departments or employees. For example, a company may require one department to work (for which they may claim JSS Open if eligible), but another department to legally close, for which they can claim JSS Closed. For instance, a restaurant where a delivery only service is in operation, the waiters and waitresses will require JSS Closed since they cannot work, and the chefs may be eligible for JSS Open. Please be advised that JSS open and JSS Closed cannot be claimed at the same time for one individual employee.
It is important to note that with both JSS Open and JSS Closed, employers must notify the employee of the agreement in writing. It must also maintain records relating to the following terms of agreement for each employee:
- Ensure that the agreement is consistent with employment, equality and discrimination laws
- Keep a written record of the agreement for 5 years
- This agreement must be made available to HMRC on request
- The employee must agree to the new arrangement
There are some things which JSS does not cover:
- Employers cannot claim for any employee that has been made redundant
- National Insurance Contributions (NICs) or pension contributions – these must be paid by the employer
- Employers and employees must also still pay pension contributions in accordance with the applicable pension scheme terms, unless the employee has opted out or stopped saving into their pension. If applicable Student Loan deductions and the Apprenticeship Levy must also still be paid
- Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant
- Employers must report these payments via a Full Payment Submission (FPS) to HMRC on or before the pay date in the normal way
- Employers must have paid the full amount claimed for an employee’s wages to the employee before each claim is made. They should also pay the associated employee tax and employee and employer National Insurance contributions to HMRC, even if the company is in administration
The full amount of any grant must be repaid if a claim is found to be fraudulent. Penalties of up to 100% of the amount overclaimed may be applied where appropriate. HMRC will consider publishing the details of employers who are charged a penalty because of a deliberately incorrect Job Support Scheme grant claim.
Employers claiming the Job Support Scheme may still claim the Job Retention Bonus in respect of the same employee if they are eligible. Grants claimed under the Job Support Scheme can be used by employers to pay an employee’s wages and help meet the Lower Earnings Limit of the Job Retention Bonus.
Details are subject to change and will be updated accordingly once the government have published further documentation.
For full details, please visit: gov.uk