Coronavirus: Advice on the Job Support Scheme

What is the Job Support Scheme?

The Job Support Scheme (JSS) is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to COVID-19 and to help keep their employees attached to the workforce.

The JSS provides 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 can get support for wages through JSS Open. Those businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by the governments can get the support they need through JSS Closed, this was previously referred to as the expanded Job Support Scheme.

A policy paper has been produced by HMRC and further guidance is due at the end of October 2020.

What is the JSS Open?

An employee will need to work at least 20% of their usual hours which the employer will continue to pay its employee for time worked, but the payment for hours not worked will be split between the employer and the government (through JSS wage support) and the employee (through a wage reduction), so the employee will keep their job and receive 66.67% of their normal pay for the hours not worked.

The employer will pay 5% of the reference 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 reference 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.

This support is in addition to any other grants which are available to affected businesses.

What is the JSS Closed?

The JSS Closed is there to provide temporary support to businesses whose premises have been legally required to temporarily close as a direct result of government coronavirus restrictions, either on a national or local basis.

Under this expansion, affected businesses will receive grants towards the wages of employees who have been instructed to and cease work at the relevant premises. This will cover businesses that have been limited to provide only delivery and collection services from their premises due to the restrictions imposed.

The government will pay two thirds of employees’ usual wages, up to a maximum of £2,083.33 per employee per month. Employers are not required to contribute towards wages but are required to cover employer National Insurance and pension contributions.

This support is in addition to any other grants which are available to affected businesses.

Businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible for this scheme.

When does it start?

This scheme has been postponed until the 2 December 2020.

Is the JSS linked to furlough and the CJRS?

No, there is no link between the CJRS or the JSS scheme. The JSS is a brand new, separate scheme which is open to employers even if they have not previously used the CJRS, including businesses claiming under JSS Closed. The furlough and CJRS scheme are still ending on 31 October 2020.

If you have employees who have been/are currently furloughed you should consider how the new JSS will impact any plans you have for their return to the workplace. Where applicable you will also need to balance this against any other employees who are still in the workplace and have not been furloughed in the past.

Am I eligible to claim a grant from the JSS?

The main eligibility criteria for JSS Open and JSS Closed is the same, but it is not possible to claim for a single employee under both schemes at the same time. All employers with a UK bank account and UK PAYE schemes registered on or before 23 September 2020 can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.

Businesses that have staff costs that are fully publicly funded (even if they are not in the public sector), should use that money to continue paying their staff, and not use the JSS.

Businesses can use the scheme if they are not fully funded by public grants, for the proportion of their revenue disrupted due to coronavirus.

JSS Open

Employers with 250 or more employees on 23 September 2020will have to meet a financial assessment test to show that their income has been impacted due to coronavirus. The financial impact test only needs to be taken once and more information including worked examples of a financial impact test can be found in HMRC’s policy paper. There will be no financial assessment test for employers with less than 250 employees on 23 September 2020.  

JSS Closed

Employers are only eligible to claim for periods during which the relevant coronavirus restrictions are in place. Employers will not be able to claim JSS Closed to cover periods after restrictions have lifted and the business premises is legally allowed to reopen. They may then be able to claim JSS Open if they are eligible.

Eligible employers will be able to claim the JSS Closed grant for employees:

• whose primary work place is at the premises that have been legally required to close as a direct result of coronavirus restrictions set by one or more of the four governments of the UK
• that the employer has instructed to and who cease work for a minimum period of at least 7 consecutive calendar days

Further guidance on the eligibility conditions will be published by the end of October 2020.

Which employees are eligible?

Employees must be on an employer’s PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020 and must be in their employment on 23 September 2020. 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.

Employees can be on any type of contract, including zero hours or temporary contracts.

Originally eligible employees needed to work at least one third of their usual hours. As part of the Chancellor’s announcement on 22 October, this figure has been reduced to 20% of their usual hours. After the first 3 months of the scheme the government will consider if the minimum threshold should be increased.

What is a viable job?

This has not been specifically defined; it appears to be a job where there is work available but at reduced levels over the next six months, and not under notice of redundancy during the period within which their employer is claiming the grant for that employee.

What is reference salary?

Under JSS Open, employers can claim for government support for their employees’ wages, up to a maximum of £1,541.75 per month, depending on how many hours they work. Currently there is only guidance on how to work out reference salary for JSS Open, further guidance at the end of October will set out how to work out reference salary for JSS Closed.

Employers cannot claim for employees’ wages for any time they spend working.

Claims should commence from the later of the date that the employee starts working reduced hours or the date when working reduced hours is confirmed in writing, not when the decision is made. Claim periods can start from 1 November 2020 onwards. Claims are subject to a maximum reference salary of £3,125 per calendar month.

The amount an employer should use for calculating an employees’ reference salary is made up of the regular payments they are obliged to make, including:

• regular wages
• non-discretionary payments for hours worked, including overtime
• non-discretionary fees
• non-discretionary commission payments
• piece rate payments

Calculations cannot include:

• payments made at the discretion of the employer or a client, where the employer or client was under no contractual obligation to pay, including:
• any tips, including those distributed through troncs
• discretionary bonuses
• discretionary commission payments
• non-cash payments
• non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

Reference salary for employees with fixed pay:

For employees who are paid a fixed salary, the Reference Salary is the greater of:

• the wages payable to the employee in the last pay period ending on or before 23 September 2020
• the wages payable to the employee in the last pay period ending on or before 19 March 2020, this may be the same salary calculated under the CJRS scheme

Reference salary for employees with variable pay:

• For employees whose pay is variable the Reference Salary is the greater of:
• the wages earned in the same calendar period in the tax year 2019 to 2020
• the average wages payable in the tax year 2019 to 2020
• the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

How do I calculate my employee’s usual hours?

Currently there is only guidance on how to work out an employee’s usual hours for JSS Open, further guidance at the end of October will set out how to work out usual hours for JSS Closed and also provide more detail for JSS Open.

There are different calculations for working out an employee’s usual hours - fixed or variable. There are worked examples for both in the HMRC’s policy paper.

Employees who work fixed hours:

For employees contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, usual hours are calculated based upon the greater of:

• the hours that the employee was contracted for at the end of the last full pay period ending on or before 23 September 2020
• the hours that the employee was contracted for at the end of the last full pay period ending on or before 19 March 2020, this may be the same number of hours calculated under the Coronavirus Job Retention scheme (NB. if employees moved to part time working, this may be varied, full details will be included in forthcoming Guidance)

This should include hours paid as annual leave and statutory leave.

Employees who work variable hours:

The variable hours calculation applies if either:

• the employee is not contracted to a fixed number of hours
• the employee’s pay depends on the number of hours they work

For employees whose number of hours varies and/or whose pay depends on the number of hours they work, the number of usual hours is calculated based on the higher of:

• the number of hours worked in the same calendar period in the tax year 2019 to 2020
• the average number of hours worked in the tax year 2019 to 2020
• the average number of hours worked from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

This should include hours paid as annual leave and statutory leave.

The calculation of usual hours is not and cannot be altered if the employee is expecting to work more or fewer hours than this in the future.

For employees who are part of a flexible work time arrangement, employers should:

• not count as hours worked any hours that the employee worked but was not paid for because they accrued paid time off which they could take later
• count as hours worked any hours that the employee took as paid time off (‘flexi-leave’), which they had accrued by working additional hours at some other time

For employees who are paid per task or per piece of work done whose hours cannot be calculated in this way, hours can be estimated based on the number of ‘pieces’ produced and the average rate of work per hour, as per National Minimum Wage rules.

How many hours must my employee work?

They must work for at least 20% of their normal hours, unless this is not possible due to a national or local requirement to close the business. If an employee has been furloughed in the past then normal hours will be based on their normal pre-furlough hours.

Is there a minimum period of time employees must be on reduced working hours?

Employees will be able to move on and off the scheme and do not have to be working the same pattern each week or month, but each short-time working arrangement must cover a minimum period of seven days.

Do I need to put anything in writing to the employee?

Employers must agree the new reduced working hours arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. Where the claim is made under the JSS Closed the written agreement must state that the employee has been instructed to and agreed to stop working for a minimum of 7 consecutive calendar days.

Employers must maintain records relating to the terms of the temporary working agreements for each employee, and:

• make sure that the agreement is consistent with employment, equality and discrimination laws
• keep a written record of the agreement for 5 years
• keep records of how many hours employees work and the number of usual hours they are not working

HMRC will publish further guidance on what to include in the written agreement by the end of October 2020.

The agreements must be made available to HMRC on request. HMRC expect employers to fully inform their employees of the claims being made.

If the employee has been previously furloughed, a new letter or agreement will be needed for the employee in order to make a claim for the grant.

Please see our template letter for confirming agreement with your employee to change and reduce their hours for the JSS Open, or to not work their hours whilst the business is closed for the JSS Closed.

• Download the JSS Open template letter
• Download the JSS Closed template letter

What do I have to pay?

You must pay your employee and all the associated costs such as NICs, pension contributions etc for the time that they work. National minimum wage rules will apply as usual to working hours.

Under JSS Open, the employee is entitled to receive part payment for the remainder of their normal hours not worked. The government announced on 22 October 2020 that it will increase what it will pay from one third of the hours not worked now up to 61.67%. The contribution is subject to a cap of £1,541.75 per month. The employer will also have to pay a contribution to the hours not worked and as from 22 October 2020 this will decrease from one third to 5% (up to a maximum of £125 per month). This is in addition to the wages paid for the hours that have been worked. The employee will bear the balance of this with a wage reduction for the remaining third.

Where the employee is unable to work at all due to national or local restrictions, the government will pay two thirds of their usual wages, up to a maximum of £2,083.33 per month, under JSS Closed. Employers are not required to contribute towards this amount but are required to cover the employer National Insurance and pension contributions

If you do not pay your relevant contribution to the hours that have not been worked you will not be eligible to claim a grant from the JSS.

Do I have to pay NICs or pension contributions?

Yes, the JSS Open and JSS Closed grant will not cover Class 1 employer NICs or pension contributions, these contributions will remain payable by the employer.

The full amount paid to the employee, including any amount met by a JSS grant is subject to the usual tax and NIC deductions. Employer NICs will continue to be payable to HMRC.

Can I top up the grant received from the JSS to full pay?

HMRC have changed what was originally stated about top ups and have confirmed as from 22 October 2020 that employers are able to top up employee wages above the level of minimum contributions at their own expense if they wish for both JSS schemes.

How do I submit a claim?

An online process will be launched 8 December 2020. Claims can be made for pay periods ending and paid in November. Subsequent months will follow a similar pattern, with the final claims for April being made from early May. More detail about this process will be published in guidance by the end of October 2020.

When will I receive my grant from the JSS?

Grant payments will be made in arrears on a monthly basis, reimbursing the employer for the government’s contribution. This means that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return. The whole of the grant must be used towards the employees’ wages.

What if I don’t have enough work to guarantee 20% of an employee’s normal hours?

If you do not have enough work to guarantee 20% of the employee’s normal hours you will not be eligible to make a claim from the JSS, unless you are a business that has been forced to close and there is no work at all for the employee. Please contact NFU CallFirst for further advice on how to manage work shortages.

Do I need to put all of my employees on reduced working hours?

No, only those who are eligible to be included in the claim for a grant. If you have enough work for some but not all of your staff, you should ensure that any decisions made as to who are put on short working are made fairly and are not discriminatory, whilst taking into account the needs of the business. Where possible consider the views of your employees and remember they cannot be forced into this arrangement. Please contact NFU CallFirst to discuss any concerns you may have about who to include in reduced working hours arrangements.

Can my employee undertake any training during non-working hours?

Employees will be able to undertake training voluntarily in non-working hours. Where time spent on training attracts a minimum wage entitlement in excess of the grant payment, employers will need to pay the additional wages.

What about my employees who are on any form of family related leave?

The government is putting plans in place to introduce parental pay legislation as soon as possible (covering maternity allowance, statutory maternity/, paternity, shared parental, adoption and parental bereavement pay) to avoid parents losing out on their entitlement to parental pay as a result of being put on the JSS during the relevant assessment period.

More details on employee eligibility will be available in further guidance published by the end of October.

What if my employee is due to go on annual leave while they are included in the JSS?

It is not yet clear how this will be dealt with but we expect there will be further guidance on this in due course.

What if the employee is unwell or needs to self-isolate whilst they are included in the JSS?

It is not yet clear how this will be dealt with but we expect there will be further guidance on this in due course.

Can I make any of my staff redundant?

Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming either the JSS Open or JSS Closed grant for that employee.

Can I also claim the Job Retention Bonus whilst using the Job Support Scheme?

Grants claimed under the Job Support Scheme can be used by employers to pay an employee’s wages and help meet the Lower Earnings Limit of the Job Retention Bonus. More information on this can be found on HMRC’s policy paper.

What will HMRC be doing to combat fraudulent claims?

HMRC will check claims and payments may be withheld if they suspect a claim to be ineligible.

The amount of any overpayment by the employer must be paid back to HMRC where a claim contains incorrect information.

The full amount of any grant must be repaid if a claim is found to be fraudulent. Penalties of up to 100% of the amount overclaimed may be applied where appropriate. HMRC will consider publishing the details of employers who are charged a penalty because of a deliberately incorrect JSS grant claim.

HMRC intend to publish the names of employers who have used the scheme. The public can report fraud to HMRC if they have evidence to suggest an employer is abusing the scheme.

Employees will be able to check if their employer has made a claim relating to them via their Personal Tax Account (sign up on GOV.UK).

You might also be interested in:

• Visit our dedicated coronavirus channel
• Furlough leave and the Coronavirus Job Retention Scheme
• Coronavirus: Advice for employers from the NFU's Specialist Advice Team
• Coronavirus: Returning to work after furlough and other periods of absence