The Government has today announced changes to the Job Support Scheme (JSS), which is due to begin on 1 November, in recognition of the increasing pressure that businesses in some sectors and areas of the UK are facing.
Under the original plans for the JSS (which were announced in September), the Government stated that employees would be required to work at least 33% of their usual hours and employers would have to pay employees’ normal pay for those working hours, plus a third of their usual wages for hours not worked (with up to a further third being funded by the Government).
In early October, the Government introduced what it initially referred to as an ‘extension’ to the JSS, which provides more generous support for businesses that are legally required to close. (In light of this extension, the two different types of support provided under the JSS are now being referred to as ‘JSS Open’ and ‘JSS Closed’. Note that JSS Closed is targeted at hospitality and leisure businesses that are required to close in certain regions and will tend not to be relevant to the manufacturing sector.)
However, businesses that are permitted to remain open but are suffering significant decreases in demand due to Government restrictions expressed concern that the original JSS Open would not provide them with a sufficient level of financial support.
Responding to those concerns, the Government has today announced that the minimum working hours requirement under the “JSS Open” will be reduced from 33% to 20% of employees’ usual hours, so that employees working just one day a week will be eligible for support. In addition, the employer contribution to pay for employees’ unworked hours will be reduced from 33% to just 5%. The Government press release explains that the Government will provide 61.67% of wages for hours not worked, up to a cap of £1,541.75 per month (which is more than double the maximum Government contribution of £697.92 under the original version of the scheme). The press release also illustrates the impact of the reduction in the employer contribution to pay for unworked hours, stating that if someone was being paid £587 for their unworked hours, the Government would be contributing £543 and their employer just £44. In his statement to Parliament, the Chancellor made clear that the JSS Open will apply to eligible businesses in all alert levels across the UK.
The Government has published a revised factsheet setting out some further information on these latest plans for the JSS Open and has stated that this increased support will be reviewed in the new year.
In addition, the Government has stated that:
- eligible employers will continue to receive the £1,000 Job Retention Bonus;
- grants for the self-employed will be doubled from 20% to 40% of previous earnings (meaning the maximum grant will increase from £1,875 to £3,750); and
- business grants will be expanded (to up to £2,100 per month) to cover open businesses in particularly affected sectors (such as hospitality, accommodation and leisure) that may be adversely impacted by the restrictions in high-alert level areas.
We expect a JSS policy paper to be published shortly, giving further details on eligibility criteria, conditions and timescales for making claims under both the JSS Open and the JSS Closed.
While these changes to the JSS were prompted by concerns raised by employers in the hospitality and leisure sectors, it appears from the information that is currently available that they will apply across all sectors. It is therefore hoped that these changes will lighten the burden for employers of keeping on staff, thereby better protecting jobs across the UK in the difficult months to come, as restrictions remain in place to seek to contain Covid-19.
How we can help
Once the anticipated policy paper has been published, we will produce a set of FAQs on the JSS Open. We will also update our template letters for employers to use to agree with employees that they will move onto the JSS Open and will provide advice to employers who have already written to their employees using our existing template letters about how best to communicate any changes.
In the meantime, our Coronavirus FAQs provide detailed guidance on working safely, self-isolation and other issues relating to Covid-19. If you are a Make UK member, please contact your adviser with any queries you wish to discuss. Alternatively, non-members are welcome to call us on 0808 168 5874, or email [email protected].