Further to our previous update on the Government’s Job Support Scheme (JSS), the Government has recently announced significant changes to the grant support programme which are likely to be welcome news for many employers!
The scheme comprises of two support routes, dependent upon the circumstances affecting the business; for employers facing decreased demand, the Job Support Scheme Open (JSSO) will apply, whereas those businesses that are legally required to close their premises, will be able to access the Job Support Scheme Closed (JSSC).
The JSSO is aimed at giving employers the option of keeping their employees in a job on reduced hours, rather than making them redundant.
On Thursday 22nd October, the Government announced the following key changes to the JSSO; providing much needed additional financial support to businesses from 1st November 2020;
The employer will continue to pay their employees as normal for the hours worked and, alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the Government. The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The Government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month.
This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Employers using the JSSO will also remain able to claim the Job Retention Bonus (JRB) is they meet the eligibility criteria.
The JSSC is designed to help employers that have been legally required to close their premises as a direct result of coronavirus restrictions, set by one or more of the four governments of the UK, by supporting the wage costs of employees who have been instructed to cease work in such premises.
Each employee who cannot work due to these restrictions will receive two thirds (2/3) of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish .
It is anticipated that this will protect employee incomes, limit unemployment and retain employer-employee matches so that these premises are able to reopen as quickly as possible when circumstances allow.
Employees may also be entitled to additional financial support, including Universal Credit.
The Job Support Scheme will be open from 1st November 2020 and run for 6 months, until 30 April 2021. The government will review the terms of the scheme in January 2021.
Employers will be able to claim in arrears from 8th December 2020, with payments made after the claim has been approved. Neither the employer nor the employee needs to have benefitted from the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
Further guidance on the steps that employers need to take to calculate and make a claim to the Job Support Scheme will be published by the end of October.
As has the been the case throughout the Covid-19 pandemic, the ever-changing situation impacts the employment relationship greatly, and it’s important to ensure that any action taken is fair, and legally complaint.
As was the case with the Coronavirus Job Retention Scheme (CJRS), an amendment to the Terms of employment, in line with the JSS, must be agreed and confirmed in writing. Employers should understand and consider if they have a contractual right to apply lay-off or short-time working with reduced pay, and if so, the terms of the JSS would be preferable to Statutory Guarantee Payments only.
Furthermore, the increase in funding may also impact on the rationale and necessity for making redundancies, and employers should take care in their decision-making with this regard. For those that are currently undergoing consultation for potential redundancies, it is important to show that they have considered and consulted on the recent changes, and to present a justifiable reason as to why the change in funding is unable to prevent job losses, if this is the case.
For more information on the scheme, or advice and support for employment matters, please contact our dedicated team on 01743 444007 or at firstname.lastname@example.org.
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