Update to the Job Support Scheme: JSS Open

October 27, 2020, By

November 1st, 2020 is when the Government’s Job Support Scheme launches. We provide the most up to date information about the latest updates on “JSS Open” here.

On Thursday 22 October 2020, Her Majesty’s Treasury announced a further update to the Job Support Scheme. This latest announcement is the second update to the scheme since it was originally introduced on 24 September 2020.

The update only applies to the Job Support Scheme so far as open businesses are concerned (now known as “JSS Open”) and effectively where you are contemplating reducing an employee’s working hours due to a down-turn in work as a result of the impact of COVID-19 on your business operations.

The JSS available for businesses legally required to close due to local and/or national restrictions (now known as “JSS Closed”) remains unchanged.
Please see our earlier update on JSS Closed here.

An overview of JSS open

The changes to JSS Open increase the extent of the Government’s financial support and protect jobs that were previously not covered under earlier versions of the scheme. In summary:

–  Employers must still pay employees their contracted wages for every hour worked.

–  In order to be eligible, employees no longer need to be working a minimum of 33% of their usual hours. This threshold has now been reduced to 20%, capturing a wider pool of employees, including those working just one day a week.

–  For every hour not worked, the Government will contribute to wages up to 61.67%, capped at £1,541.75 per month per employee. This is a significant increase in Government support compared to the previous rules where the Government’s contribution was limited to a third of wages for non-working hours, capped at £697.92 per month.

–  Employers’ required contribution to non-worked hours has now been reduced to 5%, capped at £125 per month. The revised scheme is therefore cheaper for employers to operate than previously was the case making it a potentially more viable option for struggling businesses.

–  To illustrate how the scheme now works – if an employee was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

–  Employers can top up their contribution beyond 5% at their own discretion.

–  Employers will continue to receive the £1,000 Job Retention Bonus in addition to the JSS contribution, provided they meet all the requirements.

Written Agreements from employees

If you are contemplating using the new JSS Open then you must agree on the new working arrangements with your employees.

Simply notifying employees that they are being placed on the JSS is not sufficient. Therefore, it is important that you ensure that you have written agreements from all employees who have been placed on the JSS (and that you follow up with any employees who have not yet confirmed their agreement to you).

Furthermore, records of these agreements must be kept securely for 5 years as HMRC may require employers to produce them during audits (and at any time upon HMRC’s request). You are also required to keep records of how many hours employees work and the number of usual hours they are not working.

Please note that the above update reflects the Government’s guidance as in force as of today’s date. We understand that more detailed guidance will become available in respect of the above before the end of this month (including that HMRC is apparently going to issue detailed advice about what to include in the agreement with employees and will also provide more detailed worked examples).

Contact us with any questions

If you require any further information in relation to the Job Support Scheme, including how to implement it into your business, our employment team are here to guide you.

Call us on 0161 969 3131 or leave us your details and one of the team will call you back.