Another week, another amendment! Rishi Sunak has announced yet further amendments to the new Job Support Scheme (JSS) which is due to start on 1st November. In fact, he has split the scheme into two separate schemes – one will be known as JSS Open and the other as JSS Closed.
Unsurprisingly, JSS Closed will deal with businesses that have been required to close under lockdown regulations whilst JSS Open will support those businesses which are open but working on a very much reduced basis.
Under the new JSS Open, an employee will need to work at least 20% of their normal hours. This has therefore reduced considerably from the 33% originally announced. Employees will receive their normal pay for the hours they work, and two-thirds of pay for the hours they do not work. This is subject to a cap of £3,125 per month.
For that two-thirds top-up, the government has increased its contribution substantially confirming it will pay 61.67% and the employer will only be liable to contribute 5%, plus NI and pension contributions on the full amount. This reduction will greatly assist struggling businesses.
Importantly, it has been confirmed that there must be a written agreement between employer and employee, agreeing to these changes.
Under JSS Closed, employees will receive two-thirds of their normal wages, fully funded by the government (subject to the same £3,125per month cap). Employers will only have to pay the NI and pension contributions on that amount but will not be required to contribute to wages directly. Again, there must be a written agreement between employer and employee, agreeing to these changes.
All SMEs and large businesses are eligible if their turnover has fallen due to coronavirus (according to their VAT returns). Although not strictly prohibited, large businesses which are currently paying out dividends are discouraged from applying.
The government is setting up an online portal (similar to the previous one used for CJRS/Furlough) for employers to use to claim back the payments. The first claims can be made from 8 December 2020.
Further details will no doubt be released soon. Meanwhile, for any assistance with implementing these schemes or the written agreement necessary, please contact our Head of Employment, Ilinca Mardarescu.