The Chancellor of the Exchequer, Rishi Sunak has set out the government's new measures for employment in view of the continuing Covid-19 pandemic. A new Job Support Scheme (JSS) will provide support to those employees with viable jobs.
The rationale behind the JSS is to keep people working, even if this means on shorter hours than normal, rather than making them redundant. Under the scheme employees must work at least a third of their normal hours. For those remaining hours not worked, the government and the employer will pay a third each. This means that employees working 33% of their hours will receive at least 77% of their pay. The JSS will begin from 1 November and continue for 6 months until the end of April 2021.
Support will be targeted at the businesses which need it most, so all small and medium businesses will be eligible. Large companies will only be eligible if their turnover has fallen as a result of the pandemic. The government has set out its expectation that large employers who using the JSS will not be making capital distributions such as dividend payments or share buybacks whilst accessing the scheme. There is no need for either the employer or the employee to have previously used the Coronavirus Job Retention Scheme (CJRS).
Following the Chancellor's announcement HMRC published a fact sheet on the JSS which provides a bit more detail on how the scheme will work, though further guidance on the scheme is due to be published shortly.
In order to be eligible for the JSS employees will have to have been on the employer's PAYE payroll on or before 23 September. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020. For the first three months of the scheme the employee will have to work at least 33% of their usual hours, and, once these three months have elapsed, the government will consider whether to increase this minimum hours threshold. The HMRC fact sheet states that employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
It will be possible for employees to dip in and out of the scheme, and they do not have to be working the same pattern of hours each month. However, each short-time working arrangement must cover a minimum period of seven days.
Both the government and the employer will pay a third of the usual hourly wage for every hour not worked by an employee under the scheme. The government contribution will be capped at £697.92 a month. Grant payments will be made in arrears and will not cover Class 1 employer National Insurance contributions or pension contributions (these will remain payable by the employer). The calculation for "usual wages" will follow a similar methodology as for the CJRS (full details will be provided in guidance due to be issued soon). Employees who have previously been furloughed will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
The Self-Employment Income Support Scheme (SEISS) will be extended on "similar terms" to the new JSS.
