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New Job Support Scheme

The new Job Support Scheme has been brought in to replace the furlough scheme. It means from 1 November 2020 the government will top up the wages of those workers on reduced hours until 1 April 2021. The intention is to protect jobs in businesses who are facing lower demand over the winter months due to COVID-19.

Overview of the Job Support Scheme:

  • Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one-third of their equivalent salary
  • Employees must be working at least 33% of their usual hours. The level of grant will be calculated based on the employee’s usual salary, capped at £697.92 per month.
  • Available to all small and medium-sized businesses
  • You can still use it even if you haven’t used the furlough scheme it replaces
  • Employees on the new job support scheme will not be able to have their jobs put at risk of redundancy
  • Jump to – how do I work out the calculations?

What we know so far:

Who is eligible for the JSS?

All businesses can use the scheme. However, it is important to note that large businesses will need to meet a financial assessment test. This means providing evidence that turnover is lower than prior to COVID-19. We are awaiting further information on the detail of the financial assessment test.

Employees must have been on the employer’s payroll on or before 23 September 2020. They also can’t be under notice of redundancy and cannot be made redundant while participating in the JSS.

Can employees’ hours vary under the scheme?

Yes – as long as the employee works at least 33% of their usual hours, the actual hours worked can vary from week to week. Each arrangement must cover a minimum period of seven days.

Who pays for the unworked hours?

The employer will pay as usual for the hours worked by the employee. The Government will then make a contribution towards the wages for the remaining unworked hours. The Government will pay up to one-third of the unworked hours, capped at £697.92 per month, up to a maximum of 22% of total hours. A further one-third of the unworked hours (or up to 22% of total hours) is paid by the employer. The remaining one-third of the unworked hours are unpaid. In total, the employee will receive at least 77% of their usual wages.

How to work out the calculations

 

What do we need to do to implement the scheme?

You will need to agree to the shorter hours with your employees and confirm changes in writing. This agreement must be available to HMRC on request.

How are payments made under the JSS?

Government payments are made in arrears, reimbursing the employer for the Government contribution. Employers will be able to claim from December 2020. This may be difficult for employers from a cashflow perspective.

The Government payments do not include Class 1 employer NICs or pension contributions, which remain payable by the employer.

Can I claim the Job Retention Bonus too?

Yes, you can. The Job Support Scheme is designed to sit alongside the Jobs Retention Bonus. Combined it could be worth over 60% of the average wages of employees who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs.


How do I work out the calculations?

The calculations for the new Job Support Scheme are not easy to grasp.

In order to support viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on the employee’s usual salary, capped at £697.92 per month.

For the hours the employee doesn’t work, the government and the employer will each pay one-third of their equivalent salary. The amount the government will end up paying is calculated on a sliding scale.

Hours employee worked 33% 40% 50% 60% 70%
Hours employee hasn’t worked 67% 60% 50%  40% 30%
Employee earnings (% of normal) 78% 80% 83% 87% 90%
Government grant (% of normal wages) 22% 20% 17% 13% 10%
Employer cost (% of normal wages) 55% 60% 67% 73% 80%


For example, if someone works a third of their standard hours, the government’s contribution would be two-ninths – or approximately 22%.

The employer would pay the first third, like normal, and another two-ninths on top (a third of the hours not worked by the employee). The employee would get nearly 78% of their salary.

The 22% government contribution is a maximum. For someone working 50% of their hours, the government contribution is 17%.

 


Free HR helpline for Wow clients

We realised that HR advice was needed on the Coronavirus Job Retention Scheme and furloughing staff. We’ve arranged for Wow clients to be able to call and get free advice on this and any other HR queries they have. We’ve emailed all Wow clients the details on how to access the helpline. Please let us know if you haven’t received the details.


How we can help any business with the Coronavirus Job Retention Scheme

  • Help you with your calculations
  • Run your payroll for you through this period
  • Introduce you to HR advisors/employment lawyers should you need to

If there’s anything else you need help with not listed above, please ask, and we’ll find a way.

Help me please

 


Key resources on the Coronavirus Job Retention Scheme:

  1. Overview of the key points of the scheme from the GOV.UK fact sheet
  2. Details of the Job Retention Bonus from the GOV.UK site
  3. Q+A for employers from esphr
  4. (Wow clients have access to our Expert HR helpline)

Please always remember

The resources contained in our Support Hub are intended to help you and your business and are no substitute for professional HR & legal advice. Each business is different and you should get professional advice relating to your specific circumstances. If you’d like to be put in touch with someone, please let us know.

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