News & Events
With the end of the Coronavirus Job Retention Scheme (CJRS) just around the corner and the Chancellor’s recent announcements on the Job Support Scheme, employers are faced with a raft of matters to consider when it comes to their employees. Here, Nick Wilson, partner in our dedicated employment law team, breaks down the current position and key issues for employers.
Employers have long been aware that the Coronavirus Job Retention Scheme (CJRS) will end on 31 October 2020. On 24 September 2020, the Chancellor Rishi Sunak announced that the CJRS will be followed by the Job Support Scheme (JSS). The stated purpose of the JSS was to safeguard ‘viable jobs’ and allow workers to undertake reduced hours which the employer will pay for and then the employer and the Government subsiding a percentage of the hours that the worker is unable to work. The JSS was then expanded to provide support for employers who would be forced to close their premises due to Government restrictions and would then have no work for staff to do.
However the JSS has faced a wave of criticism that it does not go far enough to help businesses or prevent redundancies. Probably as a result of that, the Chancellor has this week revealed that the level of Government subsidies under the JSS will increase significantly. We still await the final guidance dealing with the JSS but the Government has just published a policy paper summarising the different types of support under JSS – snappily titled JSS Open for employees who can work a minimum amount of hours and JSS Closed for employers who are legally required to close their premises. Following on from the end of the CJRS, the JSS comes into force on 1 November 2020.
So what does JSS Open provide for?
- Employees will have to work a minimum of 20% of their normal hours which the employer will pay them for
- The employee will receive 66.67% of the of their normal pay for hours that they are not able to work
- Of those unworked hours, the employer will pay 5% of those hours up to a maximum of £125 per month
- The Government will pay the remaining 61.67% of hours not worked up to a maximum of £1,541.75 per month
- This means that the employee will get at least 73% of their normal pay (if they earn £3,125 a month or less) which is lower than the 77% payable when details of the JSS were first announced
And JSS Closed?
- Employees who are unable to work because their employers have been forced to close will receive two thirds of their normal pay from their employer but fully funded by the Government
- The Government payment is capped at £2,083.33 per month but the employer could choose to pay monies to the employee on top of that
What employers also need to know…
- Eligible employees must have been on the employer’s RTI submission to HMRC as of 23 September 2020
- Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period
- Claim periods must be for a period of at least 7 days
- Employees can ‘cycle on and off’ JSS Open
- Employers are responsible for paying employer’s pension and NI contributions
- Large employer with 250 or more employees will be required to undergo a Financial Impact Test based on VAT returns
- There are differing statements as to how any arrangements made and agreed with employees under the JSS will need to be confirmed in writing – the final guidance will hopefully clarify that but the employee’s consent will still be needed to vary hours of work and rates of pay subject to any existing contractual provisions in place.
Our experience is that there would be little take up of the JSS based on the level of Government contributions previously announced however we are hearing of more interest now that the employer is required to contribute significantly less. We must also not forget that consideration of whether to put the employee on JSS arrangements may still be a relevant consideration in the fairness of any redundancy dismissals.
We will report further when the final guidance is published.
If you would like to discuss any of the implications for your business, get in touch with the employment team on 01482 325242, or email directly on firstname.lastname@example.org
Correct as at 2pm 23.10.2020