The Job Support Scheme will replace the furlough scheme – do you understand it and how will this work for your company?
I’m helping businesses with their redundancy programmes, as they no longer have sufficient work or income to support their current workforce. Both the Job Retention Scheme and the Job Support Scheme can help employers avoid the need for redundancy.
The Job Retention Scheme (furlough) which was set to end on 31st October 2020, has now been extended until December, delaying the start of the Job support scheme be the answer?
How does the JSS work? The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.
Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government. The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
Unlike furlough, you must pay the employee before being able to claim it back.
Eligible employees must have been on the payroll between 6 April 2019 and 23 September 2020 and they must work a minimum of 20% of their usual hours. Staff on any type of contract are eligible, including those on variable or zero hours and agency workers.
There are separate schemes for those who have diminished work but remain open and those who must legally close, they are JSS OPEN and JSS CLOSED.
You must reach agreement with your employee (in writing), if you wish to use the scheme and, the agreement must be made available to HMRC.
The scheme will start in December 2020 and will continue to April 2021.
Employees can be placed on the Job Support Scheme even if they have not previously been furloughed but you must of course gain the employee’s consent to do so.
It is important to note that your employee cannot be made redundant or put on notice of redundancy during the period the employer is claiming the grant.
Don’t forget to claim the Job Retention Bonus if you meet the eligibility criteria. This means that you could claim the one off taxable payment of £1,000. For each eligible employee that you furloughed and continuously employed up to 31st January 2021.
This information is accurate on the day of publishing but is subject to Govt amendments, please check www.gov.uk