Key points of the new JSS

• Basic eligibility for JSS requires the business must be closed by Covid legislation.  Choosing to close because you have no customers does NOT mean you qualify.
• Claiming starts in early December once the portal opens.
• Claims are being repaid in arrears, only after you have successfully submitted a claim.

!!! As at 27 October, in Scotland, you will only qualify for JSS Closed if the area is in Tier 4 (which is Tier 3 in England).

JSS scheme background

Following the launch of the scheme in late September, the final form of the scheme has just been announced.

The generosity of the scheme has increased to account for the extra pressure on employers.  Consequently, the Government is renaming the scheme ‘JSS Open’ for businesses in Tiers 1 and 2 that remain open and ‘JSS Closed’ for businesses in Tier 3 that have to close.

JSS Open

To be eligible, an employee must work a minimum of 20% of their usual hours; this has been reduced from the higher level of 33%. Employers are to pay the contracted wage for these worked hours.  The employer will pay for the hours not worked, at a rate of 5% of the usual wage capped at £125 per month; with the Government funding 61.67% of the usual wage via the JSS capped at £1,541.75 per month. These caps mean the maximum reference salary will be £3,125.

As an example, an employee with a usual monthly wage of £1,000, will be paid:

1. £200 by their employer for the 20% of hours worked (ie. 20% of £1,000)
2. £40 by their employer for 5% of the hours not worked (ie. 5% of £800)
3. A further £493.36 by the Government for 61.67% of the hours not worked (ie. 61.67% of £800)

This provides a total of £733.36, so the employee will receive a minimum of 73% of their usual wage if this doesn’t exceed £3,125. Employers must have a UK bank account and a UK PAYE scheme, and there is no requirement to have used the Coronavirus Job Retention Scheme (CJRS) previously.

Closed by law? Only then can you claim JSS.

JSS Closed

The scheme has been extended for businesses that are in the Tier 4 [Scotland] or Tier 3 [England] areas, on very high risk alert.  Your business will qualifying if it closes for a temporary period because of regional or national restrictions.

The Government JSS grant will cover two-thirds of a worker’s usual wages where they are not able to work due to their employer having to close. There is a cap at £2,083.33 per month. Employers have to fund the employers’ national insurance and pension contributions.

Where the employer has been legally required to close and the employee is not able to work, then the employee is an eligible employee. This will need to be the case for a minimum period of seven consecutive days.

Further considerations

• An employee must have been on the payroll on 23 September 2020, with an RTI submission reporting a payment for the employee by that date.
• Eligibility for JSS includes employees who left after 23 September and then re-hired.
• Employees can join and leave the scheme with flexibility.  The minimum period of seven consecutive days applies each time they re-join.
• It is a requirement that employers have a written agreement in place of the temporary working arrangement for each employee when placed on the scheme.

The usual wage or reference salary

This should only include an employee’s regular contractual payments; any discretionary payments and non-cash payments and benefits are to be excluded.

For employees who receive a fixed salary, their reference salary for JSS will be the higher of

• the wages paid in the last pay period before 23 September 2020, and
• the wages paid in the last pay period before 19 March 2020.

For employees who receive variable pay, their reference salary will be the higher of

• the wages earned in the same calendar period from the 2019/2020 tax year,
• the average wages from the 2019/2020 tax year, and
• the average wages from the period 1 February 2020, or employee’s start date if later, to 23 September 2020.

For employees who work fixed hours, their usual hours will be the higher of

• the contractual hours for the last pay period before to 23 September 2020, and
• the contractual hours for the last pay period before 19 March 2020.

For employees who work variable hours, their usual hours will be the higher of

• the hours worked in the same calendar period from the 2019/2020 tax year,
• the average hours worked in the 2019/2020 tax year, and
• the average hours worked from the period 1 February 2020, or the employee’s start date if later, to 23 September 2020.

Employers costs

As before, all employers are responsible for the national insurance or pension contributions, as they are excluded from the Government JSS grant. A further important restriction is that employers will not be able to make employees redundant or issue redundancy notices to employees whilst they are on the Job Support Scheme.

Employers will be able to make claims online from 8 December 2020, on a monthly basis in arrears, once an RTI submission has been made.

The scheme is complex as one would expect.  We expect that further information is going to be announced nearer to 1 November. Once more guidance is provided we will provide further updates.  We will help you with questions you may have or provide any further information or support.