In the latest in a series of guidance notes for the travel trade, Travlaw partner and head of employment Ami Naru outlines what we know so far about the government’s Job Support Scheme. This is correct as of September 29 and will be updated as the government issues more advice
- The Job Retention Scheme (furlough) will end on October 31, 2020. It will be replaced by the Job Support Scheme (JSS) which will start on November 1, 2020 and end on April 30, 2021.
- The JSS has been set up to protect jobs for employers facing lower demand over winter months due to Covid-19, employers must demonstrate they have viable jobs.
- Employees must work at least 1/3 of their normal hours, for which the employer must pay their normal rate for those hours. The government has already said the 1/3 threshold of minimum hours worked will be in place for at least the months of November, December and January. After the initial three months, the government may consider increasing the minimum threshold for hours worked. The JSS will therefore only be attractive to employers if there is in actual fact some work to be done, but if there is no work to be done because there is simply no work, then this scheme is unlikely to help employers and stop redundancies happening.
- The government together with the employer will then increase those employees’ wages, under the scheme covering 2/3 of the pay they have lost by reducing their working hours. The employee will forgo the remaining 1/3 of the hours not worked.
- Employers should also be aware that the JSS grant will be paid by the government in arrears, by way of reimbursement of wages actually incurred. Therefore employers will have to ensure that they have the means to make the payment of wages to the employee, as the grant will be paid out after evidence of wages being paid. Employers should also be aware that they remain responsible for all Class 1 employer NICs and pension contributions on all hours and the grant will not cover this.
- “Usual wages” for the purposes of the JSS will be the same methodology as previously under the furlough scheme. They will also be calculated based upon pre-furlough wages for those who have previously been on furlough.
- The government will pay a maximum of £697.20 per month.
- All SMEs are eligible.
- Larger employers will only be able to receive support if their turnover has fallen during the Covid crisis.
- Employers who have not furloughed staff can also take part in the scheme.
- Employers who are eligible for the Job Retention Bonus can claim under this scheme.
- Only employees on payroll on September 23, 2020 are eligible. The employer must have submitted Real Time Information to HMRC by this date.
So, can employers just put staff on the JSS? Well, firstly they need to get the employee’s agreement to short-time working and record this in writing. If the employee agrees, then the employer must ensure that the employee works at least s 1/3 of their normal hours.
The employer then needs to make payment for worked hours in the normal way and pay for 2/3 of the non-worked hours (awaiting reimbursement of 1/3 from the government), together with NICs and pension costs for all wages paid to the employee.
Meanwhile the employer cannot make the employee redundant or give notice of redundancy. So in summary the employer must have work to be done, be able to pay wages and not be wanting to make the employee redundant for any claim period – hence why the JSS is only really meant for viable jobs.
More details will be published by the government, at which point we will provide further guidance.