Job Support Scheme – All you need to know

On 24 September 2020, Chancellor Rishi Sunak announced a replacement to the Job Retention Scheme – the Job Support Scheme. Below are some key facts surrounding what is currently known about this scheme.

What is the Job Support Scheme? 

On 24 September 2020, the Chancellor, Rishi Sunak, announced his Winter Economy Plan designed to protect jobs and support businesses over the coming months. As part of the Plan, the Chancellor announced the Job Support Scheme (JSS) which will replace the Job Retention Scheme (JRS).

The Job Retention Scheme has been in place since March 2020 to provide wage assistance to employers who were unable to provide work to their employees because of the impact of COVID-19, and to avoid redundancies. Employers could claim up to 80% of an employee’s wages if the employee was unable to work at all, or if they were able to work only a portion of their normal working hours.

The JRS will end on 31 October 2020 and the JSS will begin on 1 November 2020. Although the JSS will still provide some wage cover to help employers, its aim is to help employers who can support employees doing some work but need more time to recover. This highlights the main difference to the JRS; the JSS will not provide wage assistance for an employee who is doing no work at all.

Which employers can use the JSS?

Employers of any size with a UK bank account and UK PAYE schemes will be able to use the JSS but large businesses will have to meet a financial assessment test to show that their turnover is lower now than before experiencing difficulties from COVID-19. The Government expects that large businesses using the JSS will not be making capital distributions, for example dividend payments or share buybacks, whilst accessing the JSS grant.

The Scheme is open to employers who have not previously used the Job Retention Scheme to furlough employees before, as well as those who have. An employee being placed into the JSS does not need to have been furloughed before.

The Chancellor has confirmed that employers using the JSS can still claim the Job Retention Bonus, which will provide employers with £1000 for each furloughed employee they continue to employ until the end of January 2021 who also meets other criteria.

Which employees can be placed on the JSS? 

An employee to be entered into the JSS must have been on the employer’s PAYE payroll on or before 23 September 2020 which means that a Real Time Information (RTI) submission notifying payment to the employee to HMRC must have been made on or before 23 September 2020.

The Scheme is intended to protect ‘viable’ jobs in businesses who are facing lower demand over the winter months due to COVID-19. The JSS will only support those who are working fewer hours than normal; not those who are working no hours.

A key criterion to gaining access to the JSS is a minimum level of working hours: for the first three months of the JSS, employees must work for at least one third (33%) of their normal working hours. This minimum threshold will be reviewed by the Government at the three month point.

Reduced hours working arrangements will need to be agreed with employees and notified to them in writing. HMRC may ask for sight of the agreement. In a departure from the JRS, employees cannot be given notice of redundancy or made redundant during the period which the employer is claiming from the JSS for that employee.

What are the wage arrangements for an employee on the scheme? 

An employee’s wages, when on the JSS, will be funded partly by the employer and partly by the Government.

Employers need to pay employees for the hours they work, which must be at least one third of their normal working hours. The employer must also pay the employee for one third of the amount of ‘lost hours’ – ie the hours the employee would normally work, but is not working.

The Government will provide pay for one third of the amount of lost hours up to a maximum cap of £697.92 per month. The employer’s contribution of one third of pay for hours not worked is not subject to a cap. This means that all employees on the JSS will continue to earn at least 77% of their normal wages, where the Government contribution has not been capped.

Determining what an employee’s normal wages/hours are will be done in a similar way to that required under the Job Retention Scheme and the Government will provide further details on this. Normal wages/hours for employees who have been furloughed will be their underlying wages and hours, rather than those which applied during furlough.

The JSS will not cover employer National Insurance contributions or pension contributions; employers will remain liable for these.

Example 1

An employee normally works 5 days a week and earns £350 per week. Under the JSS, they work 40% of normal working hours (2 days a week). The percentage of hours lost is 60% (worth £210). The employer pays £140 for hours worked, and a further £70 (one third of hours lost). The Government will pay £70 (one third of hours lost). The employee receives £280 in total per week.

Example 2

An employee normally works 5 days a week and earns £600 per week. Under the JSS, they work 50% of normal working hours (2.5 days a week). The percentage of hours lost is 50% (worth £300). The employer pays £300 for hours worked, and a further £100 (one third of hours lost). The Government will pay £100 (one third of hours lost). The employee receives £500 in total per week.

The Government expects that employers cannot top up employees’ wages above the JSS contribution at their own expense.

Once an employee is in the JSS, do they have to stay in it?

No. Government guidance confirms that employees can cycle on and off the scheme. There is also no requirement for the employee, once in the JSS, to work the same number of hours each month (provided any changes do not fall below the minimum working hours requirement).

However, each reduced hours working arrangement must last for at least seven days.

How will I receive the JSS funds?

Guidance confirms that JSS grants will be paid in arrears to reimburse the employer for the Government’s contribution.

Claims can only be submitted in respect of a wage costs actually incurred in given pay period after payment to the employee has been made and that payment has been reported to HMRC via an RTI submission.

Claims can be made online from December 2020 and reimbursement will be made on a monthly basis.

Office workers in England should once again work from home if they can

The Prime Minster Boris Johnson has announced new measures that are to be put into place, including that office workers in England should once again ‘work from home if they can’.

After warnings by the government’s leading medical advisers that the rate of COVID infection was rising again, Prime Minister Boris Johnson has told the House of Commons that new restrictions must be put into place – and could be needed for up to six months.

‘We always knew that, while we might have driven the virus into retreat, the prospect of a second wave was real,’ he told MPs. ‘And I am sorry to say that – as in Spain and France and many other countries – we have reached a perilous turning point.’

Mr Johnson highlighted that, a month ago, on average around a thousand people across the UK were testing positive for coronavirus every day. The latest figure has almost quadrupled to 3,929. Furthermore, while the number of new cases is growing fastest amongst those aged between 20 and 29, the evidence shows that the virus is spreading to other more vulnerable age groups.

On the advice of the four Chief Medical Officers, the UK’s COVID alert level has been raised from 3 to 4, the second most serious stage, meaning that transmission is high or rising exponentially.

The main points made by the Prime Minister were:

  • The Government is not issuing a general instruction to stay at home.
  • It will ensure that schools, colleges and universities stay open and that hat businesses can stay open in a COVID-compliant way.
  • The Government is asking office workers who can work from home to do so.
  • In key public services – and in all professions where homeworking is not possible, such as construction or retail – people should continue to attend their workplaces.
  • From 24 September all pubs, bars and restaurants must operate table-service only, except for takeaways.
  • Together with all hospitality venues, they must close at 10pm (and that means closing, not calling for last orders).
  • The requirement to wear face coverings will be extended to include staff in retail, all users of taxis and private hire vehicles and staff and customers in indoor hospitality, except when seated at a table to eat or drink.
  • In retail, leisure, tourism and other sectors, the Government’s COVID-secure guidelines will become legal obligations with businesses fined and could be closed if they breach these rules.
  • From 28 September, a maximum of 15 people will be able to attend wedding ceremonies and receptions, although up to 30 can still attend a funeral as now.
  • The ‘rule of six’ will be extended to all adult indoor team sports.
  • Plans to reopen business conferences, exhibitions and large sporting events will not now go ahead from 1 October as previously suggested.

The news most organisations likely waited for was whether they still had discretion to ask staff to return to the office in England. It seems that the government have now reversed this guidance, now once again advising staff to work from home if they can. Whilst the Prime Minister stressed that this does not apply to jobs where staff cannot work from home, such as retail, it does mean that employers will now need to consider implementing a new or further period of homeworking for staff that fall into this category.

This may be frustrating news for some businesses, especially if they have taken costly steps to make the workplace COVID-secure. However, they should bear in mind that they will, presumably, have found ways to make this work during the initial lockdown months and should, hopefully, be better prepared this time.

The Prime Minister also stressed that the measures he has announced all apply in England but the Devolved Administrations are taking similar steps. It should be remembered that guidance on working from home did not change in Scotland and Wales – it remains to work from home if possible.

Penalties

A fine of up to £10,000 for those who fail to self-isolate has already been introduced and will now be applied to businesses breaking COVID rules. The penalty for failing to wear a mask or breaking the rule of six will now double to £200 for a first offence.

‘We will provide the police and local authorities with the extra funding they need,’ Mr Johnson said. ‘There will be a greater police presence on our streets and the option to draw on military support where required to free up the police.’

Local Lockdown Grant

It has been announced by the Government that a new grant has been approved for organisations in England who must close as a result of local lockdown measures.

The support comes as some organisations continue to suffer due to the rising cases of coronavirus in their geographical areas which leads to more stringent measures being implemented across the area. Depending on the severity of the coronavirus issue in the area, some organisations have been asked to close, namely those in the hospitality and leisure industries.

Most recently, the citizens of Bolton – a Great Manchester town – were placed under local lockdown rules on 9 September, including some organisational restrictions as follows:

  • all hospitality venues (restaurants, cafes, bars, and pubs) are restricted to providing a takeaway-only service
  • late night restriction of operating hours meaning all venues, including takeaways, will be required to close between 10pm to 5am

This new grant will not yet apply to Bolton or most other cities and towns across England. This is because a trial scheme is ongoing in Blackburn with Darwen, Pendle, and Oldham only. If it is rolled out across the country, the new funding will consist of a grant of up to £1,500 paid every three weeks for as long as the restrictions apply.

Larger organisations will be given £1,500 every three weeks that they are forced to close, whilst smaller organisations will be given £1,000 every three weeks. ‘Every three weeks’ means that an initial payment will account for an initial three-week lockdown period, whilst further payments will be made on each new three-week lockdown period necessary. The amounts received by both big and small organisations will be taxable as income tax.

The only eligibility criteria for the grant is for organisations to have been asked to close due to local restrictions being implemented in their local area, except the organisations who have not been able to reopen since before the national lockdown measure was introduced – such as nightclubs. For those who are eligible, the Government has placed the responsibility for distributing the grant to Local Authorities who may be able to set further eligibility criteria of their own.

Organisations who are eligible for this payment will not be prevented from receiving further support from other government initiatives such as the Coronavirus Job Retention Scheme and more.

‘Kickstart’ scheme open for applicants

This new scheme to help young people into work and to spur Britain’s economic revival, Kickstart has been launched by the Treasury.

Employers can use the Kickstart Scheme to create new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment. The job placements should support the participants to develop the skills and experience they need to find work after completing the scheme.

Funding is available for 100% of the relevant National Minimum Wage for 25 hours a week, plus associated employer National Insurance contributions and employer minimum automatic enrolment contributions. There is also £1,500 per job placement available for setup costs, support and training.

Funding is available following a successful application process. Applications must be for a minimum of 30 job placements. If you are unable to offer this many job placements, you can partner with other organisations to reach the minimum number. To help smaller businesses, organisations offering fewer than 30 placements will be asked to make a bid through an intermediary, such as a local authority or Chamber of Commerce, who will then bid for 30 or more placements as a combined bid from several businesses. This will make the process easier and less labour intensive to apply for these smaller companies who only want to hire one or two Kickstarters.

If you are a representative applying on behalf of a group of employers, you can get £300 of funding to support with the associated administrative costs of bringing together these employers.

Kickstart is not an apprenticeship, but participants may move on to an apprenticeship at any time during, or after their job placement.

The Kickstart Scheme is available in England, Scotland and Wales.

Mr Sunak said: ‘This isn’t just about kickstarting our country’s economy – it is an opportunity to kickstart the careers of thousands of young people who could otherwise be left behind as a result of the pandemic.’ He explained that the aim is to give these young people the opportunity to build their skills in the workplace and to gain experience to improve their chances of finding long-term work. Businesses of all sizes looking to create quality jobs for young people can apply and there is no cap on the number of places. Household names including Tesco have already pledged to offer Kickstart jobs.

The scheme, which will be delivered by the Department for Work and Pensions (DWP) will initially be open until December 2021, with the option of being extended.