Important Changes to the Job Support Scheme

Introduction 

Following the announcement last week by the Chancellor of the Exchequer, HMRC has published more detail relating to the extended Job Support Scheme.

The Scheme is now split into two parts and will be known as JSS Open and JSS Closed. 

JSS Open 

This part of the Scheme is targeted at those employers who continue to operate but face reduced demand.

The Scheme will apply to employees who work at least 20% (reduced from the original entry-level of 33%) of their normal hours. The employees will receive normal pay for the hours they work, and two-thirds of pay (subject to a cap for those earning more than £3,125 a month) for the hours they do not work.

In respect of the two-thirds top-up to salary, the Government will pay 61.67% and the employer will pay 5% (plus NI and pension contributions on the full amount).

This is a significant change from the previous 50:50 split towards the top-up element and reduces the burden on employers. As such, likely, many more employers will now seek to utilise the JS Open Scheme.

We advise that, as was the case with the original Job Retention Scheme, entry to the Scheme will represent a change to the terms and conditions of employees and having written agreements in place with employees providing consent to the change will protect your business.

JSS Closed

This part of the Scheme will apply, as one would expect, to businesses which are required to close under lockdown regulations.

The practical working of the Closed Scheme is the same insofar as employees will receive two-thirds of their normal wages, funded by the Government (with the same cap for earnings of more than £3,125pm).

The employer will require to pay the NI and pension contributions on that amount. As with the JSS Open Scheme, we recommend that employees are asked to consent to the changes to terms and conditions and that a written agreement is prepared and signed to that effect.

General Points 

All SME businesses are eligible to participate in the JS Scheme. Large business are eligible to participate subject to certain restrictions if their turnover has fallen due to coronavirus (according to VAT returns).

Claims for payment from the Government will be made by employers in arrears for salary monies already paid. The Scheme opens on 1st November and the first claims can be made from 8th December which is 5 weeks after the start date.

The procedure will be that claims be made by way of an online portal, similar to the Coronavirus Job Retention Scheme.

One significant difference from the Job Retention Scheme is that employers cannot claim payment for any employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.

If you would like further information regarding the topics discussed in this blog, please contact:

Stuart Robertson by email: srobertson@gilsongray.co.uk or by phone: 07793 821 523 / 0141 433 7752

Graham Millar by email: gmillar@gilsongray.co.uk or by phone: 07841 920 102 / 0141 530 2023

You can also visit our Employment Law Team page by clicking here. 

The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.