Following much media speculation the Government has now announced a new Job Support Scheme (JSS) which has been designed to protect viable jobs as employers continue to battle the impact of the Covid-19 pandemic
The aim of the JSS is to provide ongoing support for employers who need more time to recover from the ongoing impact of the pandemic. It is designed to avoid redundancies where possible and share the financial burden of any hours not worked between the government, the employer and the employee (through a wage reduction).
The guidance is limited at this time however the following details have been announced:-
- the Government will pay one third of hours not worked by an employee which is subject to a cap of £697.92 a month. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
- the scheme will open on the 1 November 2020 (immediately following the furlough scheme) and run for six months until April 2021.
- there is eligibility criteria which includes:
- a financial assessment test which large businesses will be required to meet;
- no financial assessment for small and medium enterprises (SMEs);
- employees must have been on the employer's PAYE payroll on or before 23 September 2020; and
- for the first three months of the scheme, the employee must work at least 33% of their usual hours. After three months the Government will consider whether to increase the minimum hours threshold.
- Employees will be able to 'cycle on and off the scheme' and they do not have to be working the same pattern each month. However, short time working arrangements must cover a minimum of seven days;
- There are limitations on what the grant will cover. The grant will not cover class one employer NICs or pension contributions which remain payable by the employer.
- The "usual wages" calculation will follow a similar methodology as the Coronavirus Job Retention Scheme but again, further guidance is awaited on this.
- For the time worked, employees must be paid their normal contractual wage. For time not worked, the employee will be paid up to two thirds of their usual pay.
- Expectations are that employers cannot top up their employees wages above the two thirds contribution not worked at their own expense.
- Importantly and in contrast to the Coronavirus Job Retention Scheme, employees cannot be made redundant or put on notice during the period within which their employer is claiming the JSS grant for that employee.
The scheme has received mixed reviews so far; some businesses consider this a further lifeline to help them survive the difficult winter months, others feel that the scheme is not as helpful as they hoped because they require employees to be at work for the majority of their contractual hours to keep the business running despite reduced profits and the more hours employees work, the lower the Government contribution.
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