Today, 22nd October 2020, the Chancellor has announced significant changes to the Job Support Scheme which shall replace the Coronavirus Job Retention Scheme with effect from 1st November 2020. Previously we understood that under the JSS, an employee would have to work at least 33% of their normal hours with the cost of the unworked hours being split three ways between government (subject to a cap), the employer and the employee. The employee would therefore have received a minimum of 77% of their normal pay. However, allegedly in response to increasing demands from businesses subjected to the newly introduced “tiered” lockdown measures across England, the government have significantly increased their contribution towards employment costs for those undertaking fewer than their normal hours.
In summary, now employees must work only a minimum of 20% of their normal hours in order to be eligible under the scheme. For a 5-day per week worker, this equates to just one day of work. Further, instead of splitting the cost of the unworked hours equally, government will pick up most of the tab with their contribution increasing to up to 62% and the employer’s contribution decreasing to just 5% of unworked wage costs. The government’s monthly cap will almost double from £697.92 to £1,541.75. There appears to be little to no impact on take-home pay for the employee, but the employer will continue to fund pension contributions and NICs. A government example states that if someone is paid £587 per week for unworked hours (the employer pays for the worked hours), the government pays £543 and the employer £44.
As before, all small and medium employers across the UK will be eligible to participate in the scheme, as will large employers which have experienced a negative impact on turnover as a result of coronavirus. Participating employers remain eligible for the Job Retention Bonus of £1,000 from February 2021.
There is a separate ‘Job Support Scheme Closed’ (a rather unfortunate name) for businesses required to close by law, e.g. in Tier 3 English areas, which supports pay for employees unable to work for 7 days or longer. The government will support the eligible affected businesses by paying 67% of employees’ pay, up to a maximum of £2,100 a month. This also applies across the UK and will be mapped to Scotland’s forthcoming 5 Tiers when full details are available.
We shall continue to update our live guidance on the Coronavirus Employer Resource Centre and shall be publishing template letters and other useful documents for LAW clients as soon as possible.