To support individuals and businesses to deal with the challenges created by coronavirus during this winter, the government has planned to provide additional support to help employers retain their employees through the Job Support Scheme (JSS).
Whilst some businesses have managed to return to levels of demand near to what they experienced before the start of coronavirus or have found creative and innovative ways to adapt to the new economic reality, others continue to face challenges.
The Job Support Scheme is expected to provide different types of support to these businesses so they can get the right assistance, at the right time, according to their situation. Businesses that are operating but facing decreased demand will be able to get support through JSS Open. Those businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK will be able to get the support they need through JSS Closed.
Employers Facing Decreased Demand ("JSS Open")
Many employers can operate safely but continue to face reduced demand so they may need extra support over the winter to help keep their employees employed. For these employers, JSS Open will give employers the option of keeping their employees in a job on shorter hours rather than making them redundant.
The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and the government. The employer will pay 5% of normal salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67% of normal salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Employers who are legally required to close their premises ("JSS Closed")
For employers who have been legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK, JSS Closed will help them through the period that they are directly affected by these restrictions, by supporting the wage costs of employees who have been instructed to cease work in eligible (closed) premises
Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by the employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.
Next steps for the Job Support Scheme.
The Job Support Scheme was initially scheduled to open from 1 November 2020 and run for 6 months, until 30 April 2021. However it was announced on 31 October 2020 that the Job Support Scheme has been postponed and the Coronavirus Job Retention Scheme (commonly known as the "furlough scheme") has now been extended for at least another month until 30 November 2020.
Paying employee taxes and pension contributions.
The Job Support Scheme will not cover National Insurance Contributions or pension contributions. These contributions remain payable by the employer.
Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant. Employers must also pay to HMRC any employer NICs due on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.
Employers and employees must also still pay pension contributions in accordance with the applicable pension scheme terms, unless the employee has opted out or stopped saving into their pension. If applicable, Student Loan deductions and Apprenticeship Levy must also still be paid.
If you have a question about the contents of this article, or if you require any assistance with applying for help under the Job Support Scheme, contact us today.