Open for business: changes to Job Support Scheme Open
I’m sure by now you are all aware of the announcement last week regarding changes to the Job Support Scheme in order to further support businesses during the winter months. The scheme has been split into two: Job Support Scheme Open (JSS Open) and Job Support Scheme Closed (JSS Closed), with changes impacting JSS Open.
Originally, the Job Support Scheme ‘saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours’ (2). Now, under JSS Open ‘the minimum hours required for employees to work has dropped from 33% to 20% and the employer contribution for non-worked hours has dropped from 1/3 to 5%’ (1).
Employers who continue to retain staff will still be entitled to receive the £1,000 Job Retention Bonus too. JSS Closed is for businesses legally required to close for a minimum of 7 calendar days due to the Coronavirus and remains unchanged (2).
Here’s a quick summary of the key changes.
Changes that apply to both schemes:
- Employees on an RTI return by 23 September 2020 who then leave can be rehired and included in the scheme
- Employees can undertake training during working hours
- The financial impact test for large employers is based on VAT returns indicating a reduction in sales for the quarter ending 7 November 2020 as compared to the same quarter in 2019 (there is more detail on this in the policy paper as it is complex!). All registered charities whatever their size are included in the scheme without undertaking a financial impact test.
- Monies paid under the scheme count towards the minimum income threshold for the Job Retention Bonus
- Claims will have to be split up to the 31 October 2020 following the Coronavirus Job Retention Scheme (CJRS) rules and from the 1 November 2020 following Job Support Scheme rules even if this falls within one pay period
- Employers who have abused the scheme will be named and shamed
Other key changes for JSS Open are:
- The scheme will be reviewed in the new year so support may be reduced from 1 January 2021
- Pay can be topped up by employers above the 5% contribution
- The maximum reference salary is £3,125 per month using the same definition of pay elements as the CJRS, looking at the higher of CJRS reference pay or pay as at 23 September 2020 for fixed rate employees, and for variable the higher of:
- corresponding period 2019/20
- average wages in 2019/20 or
- average wages from 1 February 2020/start date to 23 September 2020
- The cap of the government contribution is now higher at £1,541.75 per month and for employers, who now pay 5% for unworked hours, £125 per month. Employees receive 2/3 of pay for unworked hours: 61.67% from the government and 5% from the employer
- Calculating usual hours is similar to CJRS but the guidance is unhelpfully incomplete if people have reduced their contracted working hours since furlough ended
- Claims can be made from 8 December 2020
- Employees can check via their Personal Tax Account (PTA) if a claim has been made on their behalf – we had been waiting to hear how this would work and this is an interesting way to boost sign up to the PTA
For JSS Closed:
- The cap for government funding of 2/3 of normal pay is £2,083.33 per month and can be topped up
- How to calculate this will not be published until the end of October!
The schemes run alongside each other for a business that has some premises closed and some open. It is not clear how employees with two roles with the same employer, one that continue from home and one that is premises based and the premises are closed, will work.
The uncertain areas that we would hope we would work in the same way as the CJRS:
- That all workers types are included, for example office holders and deemed employees
- The ability take holiday during JSS Open and Closed periods and pay that at 100%
- The inclusion of TUPE’d staff and staff subject to a PAYE restructure
- Confirmation that duties as a union rep and pension trustee can continue during non-working hours
- What happens if premises are subject to a change of restrictions to open/closed within the 7 day minimum temporary working agreement
It is very worrying that throughout both the updated factsheet (source 1 below) and the policy paper (source 3 below) it says that further guidance, and the new legislation in respect of the impact on family related payments, will be available at the end of October. Particularly given that some employers will have already run their November payrolls by then. It’s also concerning that, as with the CJRS, we have no legislation yet and we know working from guidance only is a dangerous way to proceed!