The Chancellor has announced the introduction of the Job Support Scheme effective from 1 November 2020.
A new wage subsidy scheme, the Job Support Scheme (JSS), will replace the Job Retention Scheme (JRS) when it ends on 31 October. The JSS will run for six months from 1 November 2020, and aims to maintain employees in viable jobs, rather than preserve posts which are likely to become redundant when the JRS ends. Key aspects of the new scheme are summarised in this article.
The JSS is open to all small and medium sized enterprises and larger businesses whose turnover is impacted by COVID-19. However, larger businesses are not expected to make distributions whilst using the scheme.
There is no requirement for the employer to have participated in the JRS, and employers who receive JSS funding remain eligible for the Job Retention Bonus (JRB). Employers must also have a UK bank account and PAYE scheme.
Participating employees must have been included in a Real Time Information (RTI) submission to HMRC on or before 23 September and must not be under notice of redundancy.
Short time working arrangements
Participating employees are required to work at least 33 percent of their ‘usual’ hours and this requirement may increase after three months. However, employees can work flexibly; potentially rotating on and off the JSS.
Employers must enter into written short time working agreements with participating employees and these agreements must cover a period of at least seven days. This necessary change to employees’ contracts is effectively a temporary variation to terms and conditions (similar to a flexible furlough agreement).
The financial support
Employees should receive full pay, funded entirely by their employer, in respect of hours worked. For each ‘usual’ hour the employee does not work, the employee will receive 2/3 of their usual pay with:
Employer’s NIC and pension will not be covered by the JSS and the expectation is that employers cannot top up salaries.
The JSS is therefore less generous than the JRS.
Employers will be reimbursed on a monthly basis, after payment of the relevant salary has been reported to HMRC through the RTI system, and HMRC will notify employees directly of details of claims that include them.
What should employers do now?
Employers will need to plan their needs in advance. This will involve reviewing workforce and cashflow requirements over the next six months to:
The JSS is intended to protect ‘viable’ jobs. However, limited guidance on the JSS is currently available and as such, it is still unclear how this will be interpreted. Further detailed guidance will follow government engagement with key stakeholders.
Additionally, employers in some sectors may be unable to offer staff at least a third of their usual hours but may still expect to recover. Those employers appear unable to access the JSS.
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