COVID-19 Update: ‘Job Support Scheme’
Earlier today, the Chancellor announced a new job scheme as part of the Winter Economy Plan.
The existing Coronavirus Job Retention Scheme (CJRS) will end as of 31 October, as originally planned. However, from 1 November 2020, the Government intends to introduce a Job Support Scheme (JSS). Key elements of the JSS are that:
- The JSS will remain open for 6 months, from 1 November 2020. Participation in JSS would be in addition to the Job Retention Bonus (see further details here).
- The aim of the new scheme is to support employers with paying the wages of employees who are working reduced hours, due to decreased demand. It is being introduced in an effort to minimise redundancies of ‘viable’ roles.
- To be eligible, employees must work at least 33% of their normal hours of work. The employer is responsible for the employees’ pay for those hours. The Government and the employer would then each contribute one third of the pay for the hours not worked. As such, we understand that an employee who works 33% of their normal working hours would receive at least 77% of their normal wages; 55% of which would be paid by the employer, and 22% by the Government.
- The level of the Government’s grant will be based on the employee’s usual salary, capped at £697.92 per month.
- Small and medium-sized businesses in all sectors will be eligible to participate in JSS. Large businesses will also be eligible provided that their turnover has reduced due to the COVID-19 pandemic.
- The JSS will be open to employers even if they did not participate in the CJRS furlough scheme.
The above proposals will involve continuing salary costs for employers (who will be partially sharing the burden of topping up salaries for hours not worked). It is unquestionably far less generous than the CJRS. Participating in the JSS may therefore not be attractive or viable for all employers. However, it could provide welcome support for some.
As always, the devil will be in the detail of the scheme. We expect further detailed guidance to be published by the Government. In the meantime, the Government have published general information on the JSS and other measures announced today here. The Government has also published a factsheet setting out more details about how the JSS will operate in practice here.
We will provide an update once we have further details.