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COVID-19: Chancellor announces Job Support Scheme as part of Winter Economy Plan

Yesterday, the Chancellor announced details of the Job Support Scheme (JSS) as part of the Winter Economy Plan. The JSS is intended to operate as the successor to the Coronavirus Job Retention Scheme (CJRS) (Flexible Furlough Scheme) with the aim of protecting viable jobs in businesses facing lower demand over the winter due to the impact of COVID-19. The will run for six months from 1 November 2020 as the CJRS comes to an end on 31st October 2020.

Further detail of how the JSS will work is expected in the form of guidance which we understand will be published soon but in the meantime, the key points to be aware of are as follows:

  • an employee will need to work and be paid for at least one-third of their normal hours (33%). For the employee’s remaining hours (67%), one-third (22%) is paid by the employer and one-third (22%) is paid by government. The level of the government grant will be calculated based on the employee’s usual salary, capped at £697.92 per month. This means an employee will receive at least 77% of their pay (where the government grant has not been capped). The employer will be reimbursed in arrears for the government contribution.
  • to be eligible, employees must have been on the employer’s Real Time Information submission on or before 23 September 2020
  • the government’s grant will not cover Class 1 employer NIC or pension contributions, which remain payable by the employer
  • ‘usual wages’ will follow a “similar” methodology to the CJRS
  • working patterns can vary, but each short-time working arrangement must cover a minimum period of seven days
  • the minimum 33% threshold hours which an employee must work, may be increased in months 4-6 of the scheme
  • the JSS will not be available for employees who have been given notice of redundancy.
  • all small and medium sized businesses will be eligible. Larger businesses will only be eligible if their turnover has fallen during the pandemic and the government expects that they will not be making capital distributions (such as dividends) while using the JSS.

the JSS will be open to employers throughout the UK with a UK bank account and a UK PAYE scheme regardless of whether they have used the furlough scheme.
employers who retain furloughed staff on shorter hours will be able to claim under both the JSS and the Jobs Retention Bonus.
HM Treasury has published a factsheet to explain how the JSS will work including details on the eligibility criteria for employers and employees, the wages covered, how employers can claim and how HMRC will carry out checks:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/921389/Job_Support_Scheme_Factsheet.pdf

In the meantime, if you have any questions about the JSS or any other employment law related issues affecting your business as a result of COVID19, please feel free to contact a member of the Spectra Team.

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