Chancellor Rishi Sunak has announced significant enhancements to the Job Support Scheme (JSS), bringing it closer to the current furlough grants. In short: employees can work fewer hours, employers will have to pay less, and the UK Government will pay more.

The key changes applicable to businesses that can legally remain open are summarised below:

  • The minimum working hours requirement has been reduced from 33% to 20%. This means employees working just one day a week will be eligible. Employers must pay employees in full for all hours worked.
  • An employer's contribution to non-worked hours has been cut from 33%, to just 5% (capped at £125 per month). Employers must pay full National Insurance contributions (NICs) and auto enrolment pension contributions.
  • The UK Government's contribution to non-worked hours has increased from 33%, up to a maximum of 61.67% (capped at £1541.75 per month) paid in arrears.
  • The employee may still need to forego wages for 33% of unworked hours unless their employer elects to top up pay.
  • There will be no financial impact test for small and medium enterprises (SMEs with fewer than 250 employees) or for charities.

The government has updated its JSS Open Support Factsheet explaining these enhancements in more detail and including helpful worked examples. Further information is set out below.

The more comprehensive JSS available to businesses that are legally required to close remains unchanged. The government will support these businesses by paying 67% of an employee's salary, up to a maximum of £2,100 a month. Employers will not be required to contribute towards wages, but will have to continue to pay NICs and pension contributions.

More details about the JSS for businesses that can legally remain open:

The UK Government contribution will be capped at £1541.75 per month. Employers will have to fund payments in full to employees initially, with the JSS grant claimed retrospectively. The government contribution will be capped at £1541.75 per month, which is based on a monthly reference salary of £3,125. The full JSS grant must be used to pay the employee. Where an employee earns £3,125 or less per month, they will earn at least 73% of their normal wages under the JSS. Employers will be required to pay employees 5% of non-worked hours, capped at £125 per month, and they will have to pay NICs and automatic enrolment pension contributions in full. Employers can choose to top up employee's wages above the 5% contribution.

The JSS is open to employers across the UK, even if they have not previously used furlough. All employers with a UK bank account and UK PAYE schemes can claim the JSS. Large employers (with 250-plus employees) will have to meet a financial impact test, and their turnover will have to have stayed level, or be lower now than it was prior to the impact of Coronavirus. The JSS will be available for six months starting from November. Employees must be on an employer's PAYE payroll on or before 23 September 2020 to qualify for the JSS. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

Employers must agree the temporary working arrangement for shorter hours with employees. As with the furlough scheme, this must be agreed in writing. Employees will not have to work the same pattern each month, and can 'cycle on and off' the JSS. Each short time working arrangement must cover a minimum of seven consecutive days. Employees who have previously been furloughed will have their underlying usual pay and/or hours used to calculate their usual wages for the purposes of the JSS, not the amount they were paid while on furlough.

Employers will remain eligible to claim the £1,000 Job Retention Bonus in February. The UK Government estimates that, taking both the JSS and Job Retention Bonus into account, employers could receive over 95% of the total wage costs of their employees, if they are retained until February.

The other JSS rules will remain in place as previously announced. A number of questions remain, including what the position will be with regards to annual leave entitlement. Further guidelines are awaited prior to the JSS opening on 1 November. The UK Government has confirmed that employers will be able to claim through an online portal from 8 December.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.