The Job Support Scheme (JSS) that The Chancellor announced in early October is changing after some objections from business leaders.
Originally, the JSS was designed to replace the Coronavirus Job Retention Scheme (CJRS), which became better known as the furlough scheme. CJRS came to an end on 31st October, meaning some businesses faced the decision to make redundancies due to difficult trading conditions.
Under JSS, the government was planning to give wage support to employees providing they worked at least one-third of their usual hours. The employer was then expected to contribute an additional one-third of usually pay for hours not worked.
The government announced an extension to the JSS for businesses forced to close due to tighter local or national restrictions. Businesses in Tier 3 areas will see the government paying two-thirds of employees’ wages, up to £2,083 a month. This is now classed as JSS (Closed).
But those in Tier 2 areas complained that although not forced to close, restrictions may result in significantly reduced demand. To answer critics, the government has changed the JSS so there are two schemes: JSS Open and JSS Closed.
Both schemes start from 1st November and will only last six months, unless changes are made. The JSS Closed scheme doesn’t change, but we outline the JSS Open scheme here.
Here is what you need to know about the changes to the Job Support Scheme.
Job Support Scheme Open
The JSS Open scheme employees must work at least 20% of their hours, for which employers must pay their salary as normal. The amount the employer must contribute in lieu of wages for unworked hours is now 5% and is capped at £125 per month. But employers can choose to pay more if they wish.
Under the scheme, the government contributes 61.67% for hours not worked, up to £1,541.75, an increase from the original £697.92. As a result, employees receive at least 73% of their normal pay.
To be eligible for this new scheme the employee must:
- Have been on the payroll on or before 23 September 2020 and,
- Work at least a third of their normal hours.
The scheme is flexible so employees can cycle on and off it, but this must be on a minimum 7-day period. JSS Open is not limited to any sector; it is available to any employers with eligible employees, a UK bank account and a UK PAYE sheme.
In addition, employers using this scheme may also be able to claim the Job Retention Bonus.
The government is yet to publish details on how this will work for those on zero-hour contracts and irregular hours.
Hopefully, this new JSS will provide some help in supporting businesses who need to operate at reduced capacity. However, this may not prevent all businesses from failing or struggling.
For more details, a factsheet is available to download from the government’s website.
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