Vina Madhavji considers the new Job Support Scheme announced today
The Chancellor has announced that a new Job Support Scheme (‘JSS’) will commence on 1st November for a period of 6 months until April 2021.
Under the JSS, where an employee is working at least 33% of their “usual hours”, employers will be eligible to claim a grant from the government towards the employees salary for hours not worked.
An employer will be required to continue to pay the salary for those hours that are worked. For the hours not worked by the Employee, the government and the employer will each pay one third of the Employees salary for the unworked hours.
The level of the government grant will be calculated based on employee’s usual salary (i.e. not furloughed salary), capped at £697.92 per month. The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
The 33% minimum hours will be open to review by the government after 3 months.
In order to eligible under the scheme, an employee must be on the employers payroll on or before 23rd September 2020. It is not necessary for an employee to have been previously furloughed. The employee must not be on a redundancy notice to be eligible under the JSS scheme.
The Scheme is open to small and medium-sized enterprises with a UK bank account and a UK PAYE scheme. Large businesses will be required to demonstrate that their business has been adversely affected by COVID-19. The employer will be reimbursed in arrears for the government contribution.
Employers may at the same time claim the Job Retention Bonus of £1000, when a previously furloughed employee is retained in continuous employment until at least 31st January 2021.
This new scheme provides less financial support to Employers than the Furlough Scheme, which ends on 31st October. Those employers who are considering making redundancies should be mindful of the relevant minimum statutory consultation periods. Those Employers who wish to make 20-99 redundancies are required to commence consultations at least 30 days before any redundancies take effect. Those making more than 100 redundancies must commence consultations at least 100 days before any redundancies can take effect.
We will keep you updated as further information becomes available.
Further information can be found on the gov.uk website
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