The Chancellor, Rishi Sunak, announced on 22 October 2020 further changes to the Government’s Job Support Scheme (JSS) which comes into effect on 1 November 2020, significantly increasing the Government’s contribution and reducing the employer’s contribution to employee wages in the hope that increased support will prevent redundancies and save jobs during the second wave of the pandemic.
Under the first limb of the JSS and as set out in our previous article, the original rules of the JSS provided that an employee would have been required to work and be paid for 33% of their normal hours, with their employer and the Government each paying a third of the remaining unworked hours.
Following the announcement on 22 October 2020 however, the updated JSS rules mean that an employee will be required to work and be paid 20% of their normal hours and their employer will make a reduced contribution of 5% to the remaining unworked hours plus employer pension and NI contributions. The Government will provide up to 61.67% of wages capped at £1541.75 per month. This is more than double the amount of £697.92 when the JSS was first announced. This part of the scheme will be known as JSS Open.
This amendment to the rules means that those working just one day a week will be eligible. JSS Open will apply to businesses in all alert levels which can show that there has been an impact on revenue due to COVID-19.
Under the second limb of the JSS and as set out in our previous article, where a business is legally required to close, the Government will continue to pay two thirds of employee salaries where they cannot work for a week or more. This part of the scheme will be known as JSS Closed.
The first version of the JSS indicated that there was an expectation that employers would not top up wages. For both JSS Open and JSS Closed, however, employers can top up wages beyond the amounts provided for.
Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period. It is unclear whether this covers employees serving notice for reasons other than redundancy.
Further announcements made on 22 October 2020 include:
- A new grant scheme for businesses impacted by Tier 2 restrictions, even if they are not legally required to close. Additional funding for Local Authorities will make available cash grants up to £2,100 a month to struggling businesses and which can be backdated to August 2020; and
- A doubling of the self-employed grant from 20% to 40% with a cap of £3,750.
