Rishi Sunak recently announced a radical extension to the Job Support Scheme ('JSS') that he unveiled a fortnight ago.
The JSS was designed to encourage long term support (with costs shared between the employer, the government and the employee) for "viable jobs" only, to follow on from the more generous CJRS scheme. Under the 'standard JSS' the Government contribute 1/3rd of the shortfall of wages (capped at £697.72pm) for employees who are working reduced hours, but working at least 33% of their normal (pre-furlough) hours. The employer would contribute a further 1/3rd of the shortfall, and the employee would forego the final third. Neither the employer nor the employee concerned have to have utilised furlough under the CJRS to make use of the JSS.
The Chancellor has had to adapt the JSS to take account of the increasing likelihood of more significant restrictions in certain geographies and sectors designed to stem the infection rate. The purpose of this extended grant under the JSS is two-fold – to reduce job losses and to ensure businesses that are forced to shut for a period of time can reopen as quickly and efficiently as possible (i.e. with a body of employees ready to return to work once allowed).
What exactly is the expanded scheme?
It is a generous extension to cover 2/3 of wages (up to a maximum of £2,100 per employee per month) for employees of businesses that are legally forced to shut due to coronavirus restrictions – provided those employees were employed (and included on an RTI submission) on or before 23 September 2020.
The government has been explicit that:
- businesses with premises that are forced to be restricted to delivery or collection only services from their premises will be covered by the extended JSS; whilst
- businesses required to shut by local public health authorities are not covered by the extended JSS.
Businesses will only be able to claim under the extended JSS whilst subject to restrictions and employees must be furloughed for a minimum of 7 consecutive days. Claims will be based on the number of eligible employees who have been instructed to cease work at relevant premises and will be made monthly in arrears. Employers will be able to top up the pay given to employees under the extended JSS.
It is more generous than the current terms of the CJRS since smaller companies will not have to make contributions to their employee's wages at all under the expanded JSS (i.e. where they have been forced to close), whilst larger business will be asked to cover the national insurance and pension contributions only where these are incurred (equivalent to around 5% of wages).
How long will it run for?
1 November to 30 April 2021 – meaning that it will follow on directly from the end of the CJRS scheme. There is a slated review date in January.
Do we know the detail?
No. No detailed regulations or rules have yet been published. It is therefore not yet at all clear:
- Which businesses and where are going to be asked to shut (and for how long).
- How exactly eligibility will be determined / confirmed.
- How normal pay will be calculated (although this is highly likely to follow the calculation methodologies previously used under the CJRS).
- If this will include businesses that have not been able to reopen since the initial restrictions in March.
More guidance is due to be set out on the extended JSS by HMRC soon (and it will need to be soon).
What would you need to think about if you are in a sector or region that is likely to be required to shut in the short term?
Many more businesses will take up the extended JSS than the 'standard' JSS because of (a) the low/no cost to the employer; and (b) the fact it will only apply to businesses forced to have no other earned income for a period of time.
Businesses in the hospitality sector in particular appear to be likely to be targeted by more extreme restrictions in some geographies.
Look out for more detailed guidance and begin informal discussions with employees if you think this would be a scheme you would use if needed – with the aim of reassuring employees if you think you would plan to use the extended JSS if forced to shut. Consider seeking explicit written consent from employees now to be placed onto the extended JSS if and when you are legally forced to shut owing to escalating restrictions. You will likely to need, at the same time, to think about whether the standard JSS (with its significant extra cost to employers) would work for your business or not – and, if not, what this means in terms of short to medium term employment plans.