It’s been another week of announcements on how the Government intends to deal with Covid-19 and the financial support packages that are to be in place to support businesses and jobs throughout this time.
The most significant change announced yesterday was the changes to the Job Support Scheme which in its original form, in my opinion, did not provide a meaningful level of support for employers when deciding on the need to make redundancies.
This has now changed quite significantly following yesterday’s announcement and should certainly impact on your decision making when deciding whether or not to keep staff on during the downturn.
Calculating the net pay and amount to claim via the Job Support Scheme looks to be more complicated than the Job Retention Scheme. As before, if we run your payroll we will do this for you as part of payroll services. If we do not run your payroll and you need assistance, please get in touch so that we can help.
The Job Support Scheme – updated 22 October
The Job Support Scheme (JSS) is designed to provide additional support to help employers retain their employees through the winter.
- Businesses that are operating but facing decreased demand can get support for wages through “JSS Open”.
- Businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK can get the support they need through “JSS Closed”.
JSS Open- Employers facing decreased demand
JSS Open will give employers the option of keeping their employees in a job on shorter hours rather than making them redundant.
The employee 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 worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government. The employer will pay 5% of salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67%, of salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
JSS Closed – Employers who are legally required to close their premises
JSS Closed will help employers through the period where there are legally required to close by supporting the wage costs of employees who have been instructed to cease work in closed premises.
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.
Essentially, JSS Closed will work just like furlough, with no cost to the employer barring E’er NICS and pensions contributions, with the employee receiving 66.67% of their usual wages.
Time frames
The Job Support Scheme will be open from 1 November 2020 and run for 6 months, until 30 April 2021, with a review of the terms of the scheme planned for January.
Employers will be able to claim in arrears from 8 December 2020, with payments made after the claim has been approved.
Neither the employer nor the employee needs to have benefitted from the Job Retention Scheme to be eligible for the Job Support Scheme.
Eligibility criteria
Employers will be able to access the Job Support Scheme if they have enrolled for PAYE online (as with furlough) and are based in the UK.
Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE payroll between 6 April 2019 and 23 September 2020.
Eligible employers will be able to claim the JSS Open grant for employees who are working at least 20% of their usual hours.
Employers are eligible to claim JSS Closed if their business premises at one or more locations has been legally required to close as a direct result of coronavirus restrictions set by one or more of the four governments of the UK. This includes premises restricted to delivery or collection only services from their premises and those restricted to provision of food and/ or drink outdoors.
Employers are only eligible to claim for periods during which the relevant coronavirus restrictions are in place. Employers will not be able to claim JSS Closed to cover periods after restrictions have lifted and the business premises is legally allowed to reopen. They may then be able to claim JSS Open if they are eligible.
Paying employee taxes and pension contributions
The Job Support Scheme grant will not cover Employer National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer i.e. this is the same as how the Job Retention Scheme worked in recent months.
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.
The claim process will work in the same way as the Job Retention Scheme. The employer will need to calculate how much is due to the employee and run that through their payroll. Then, a separate claim will be made on the Job Support Scheme for reimbursement.
The first claim for November wages can be made after the 8th December.
Employers claiming the Job Support Scheme may still claim the Job Retention Bonus in respect of the same employee if they are eligible.
Think that about it for now! Please get in touch if you have any queries.