The government today announced it will significantly increase the reach of its winter support schemes to help support businesses and employees over the coming winter months across the UK. The new Government Job Support Scheme (JSS) will open on 1 November 2020, immediately after the Coronavirus Job Retention Scheme comes to an end on 31st October 2020 and will run for 6 months, until April 2021.
The focus of the new Job Support Scheme is to ‘protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19’. The support will be targeted to those businesses who continue to be impacted by Coronavirus and who can support their employees doing some work, but that need more time for demand to recover. An update to the JSS announced on 22nd October will offer more support to businesses in high risk areas and also offer support to those businesses forced to close by lockdown rules.
Under the previous furlough scheme (Coronavirus Job Retention Scheme) in October, the Government paid 60% of workers' wages for the hours the employee was on furlough, however under the new scheme it will pay a maximum of 66% if they are closed, and 62% of employee hours not worked if they can open.
With the introduction of local Covid alert levels across the country, many businesses are still facing uncertainty and some business may have to close their premises due to coronavirus restrictions over the winter months. The support offered under the Job Support Scheme will differ for open and closed businesses. Employers will be able to claim from 8 December, covering salary for pay periods ending and paid in November.
The scheme aims to support businesses that are open by allowing employers to bring employees into the workforce on a part-time basis where there is limited demand due to Covid-19.
Under the new scheme, employers will continue to pay their employees for time worked, but the cost of hours not worked will be split between the employer and the Government. The Government will pay 62% of hours not worked up to a cap, with the employer contributing 5%.
The Government contribution will be capped at a maximum payment of £1,541.75 a month. The employer will be reimbursed in arrears for the Government contribution.
The government states that these workers will be paid at least 73% of their wages under the JSS.
To be eligible, employees will need to work a minimum of 20% of their usual hours for the first 3 months of the scheme and be on an employer’s PAYE payroll on or before 23 September 2020. Employers cannot claim for an employee that has been made redundant or put on notice of redundancy during the claim period. Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
Neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme in order to be eligible for the JSS. All employers with a UK bank account and UK PAYE schemes can claim the grant, but large businesses will have to meet a financial assessment test. The grant will not cover Class 1 employer NICs or pension contributions, therefore these contributions will remain payable by the employer.
In order to support closed businesses, the chancellor, Rishi Sunak announced increased support within the Job Support Scheme on 22nd October to help protect jobs in businesses forced to close due to local and national restrictions, particularly in the hospitality industry.
Where the coronavirus restrictions legally require business premises to close, in any region or nation of the UK, the Government will help to pay the wages of employees. Therefore, if a business is forced to close their doors, and the employees are unable to work for one week or more, the Government will pay two-thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
The scheme applies to all business premises legally required to close, including premises restricted to delivery or collection only services and those restricted to the provision of food and/or drink outdoors. However, businesses are only eligible to claim the grant whilst they are subject to restrictions. Unlike the Jobs Support Scheme for open businesses, closed businesses will not have to contribute wages and will only be expected to pay Employer NI and pension contributions.
In order to be eligible for the JSS Closed grant employers should discuss with their staff and make any changes to their employment contract by written agreement. It is also worth bearing in mind that when employers are making decisions about the process or deciding who they should instruct to stop work, equality and discrimination laws still apply in the usual way.
Employers must have reached written agreement with their employee (or reached written collective agreement with a trade union where the relevant terms are determined by collective agreement) that they have been instructed to and agree to stop working for a minimum of 7 consecutive calendar days. The agreement must be available for view by HMRC on request and employers must maintain records relating to the terms of these arrangements for each employee.
To further support businesses during this uncertain time, employers using either the Coronavirus Job Retention Scheme or the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
The Job Retention Bonus is a one-off taxable payment of £1,000 that an employer can claim for each eligible employee previously furloughed and will continue to be employed until 31st January 2021. The bonus can be claimed by employers between 15th February 2021 and 31st March 2021 and this does not need to be paid to the employee.
The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.
Values of each grant:
Businesses in 'very high' tier 3 alert level areas will qualify for greater support whether closed (up to £3,000/month) or open.
We know that this is a difficult time for many employers and employees. The Hegarty employment law team are experienced in dealing with all types of employment issues. Whatever your situation, we can help.