COVID-19: Job Support Scheme Q&A

The Job Support Scheme (JSS) is a government-funded scheme that provides a partial contribution to wages for employers whose operations are affected by the COVID-19 pandemic. The JSS is designed to cushion the impact of the closure of the Coronavirus Job Retention Scheme (CJRS). It is aimed at supporting viable jobs by helping employers retain staff despite having less work for them to do.

There are two levels to the JSS depending on how the employer's business has been affected.  

"JSS Open" applies to employers who are able to remain open but face reduced demand due to COVID-19. Such employers have the option of reducing hours rather than making employees redundant. Under JSS Open, employees work at least 20% of their usual hours, which are paid for by the employer. Employees will then receive 66.67% of their normal pay for the hours not worked, with the cost shared between the employer and the Government.  The employer pays 5% of normal pay for the hours not worked up to a cap of £125 per month, while the Government contributes 61.67% up to a cap of £1,541.75 per month.

"JSS Closed" applies to employers who are legally required to close their premises as part of local or national restrictions. For these employers, the Government will contribute two thirds of normal wages, up to £2,083.44 per employee per month, for any employee who cannot work due to the closure. Employees must be off work for a minimum of seven consecutive days to be eligible. Under JSS Closed, employers are not required to contribute towards such wages but will be required to cover employer NICs and employer pension contributions on the amounts paid to employees.

An employer which is legally required to close can claim under JSS Closed and JSS Open at the same time (in respect of different employees) where it has some employees who cease work altogether and others who work reduced hours (e.g. HR and payroll staff).

The JSS was due to begin on 1 November and run for six months immediately following the closure of the CJRS. However, the JSS has been suspended following the extension of the CJRS and the JSS will now begin when the CJRS closes. For details of the extension of the CJRS, please see our briefing here. 

All employers (of all sizes and in all sectors) in the UK are eligible for the JSS, provided they have suffered reduced business activity due to COVID-19 and they have a UK bank account and a UK PAYE scheme. Employers may be asked to confirm they are experiencing reduced business activity when making a claim under JSS. In addition, for JSS Open, large employers will have to meet a financial assessment test by demonstrating their turnover has remained equal or fallen since the COVID-19 pandemic. Large employers and their associated companies will also be expected not to make capital distributions to shareholders (such as paying dividends) while in receipt of the subsidy. Large employers for these purposes are those with 250 or more employees as at 23 September 2020. No such restrictions on eligibility apply to small and medium employers.

For JSS Closed, only employers who are legally required to close as a direct result of COVID-19 restrictions set by one or more of the four UK governments are eligible. This includes employers who are restricted to delivery or collection only services and those restricted to the provision of food and/or drink outdoors. Such employers can only claim for periods during which such restrictions are in place.

Employers do not have to have previously used the CJRS to be eligible for JSS Open or JSS Closed.

Administrators of businesses in insolvency should only access the JSS if there is a reasonable likelihood of retaining the employees.

Large employers (those with 250 or more employees) will need to show that their turnover has remained the same or fallen since the COVID-19 pandemic to be eligible for JSS Open. This is done by comparing their total sales figures on their VAT returns for the three-month period ending 7 November 2020 with the same period in 2019. Where VAT returns are submitted quarterly, the employer should use the VAT return which is due to be filed and paid between 31 August 2020 and 7 November 2020. Employers who submit less frequently should compare the three consecutive months which are due to be filed and paid by 7 November 2020 but will need to have submitted a VAT return between 31 August 2020 and 7 November 2020 to be eligible. If the total sales figure for the relevant period in 2020 is equal to or less than the same period in 2019, the employer can claim under the JSS. This will be applied on a self-assessment basis, but employers are advised to keep records as HMRC will have the power to audit use of the scheme and reclaim wrongly obtained funds.

Large employers who are part of a VAT group will use the turnover figures for the VAT group for this calculation.

Employers who are not VAT registered must compare their average monthly turnover from 1 May 2020 to 30 September 2020 with the average monthly turnover from 2019.

Small and medium employers do not need to demonstrate any impact on turnover to claim under JSS Open or JSS Closed.

Only employees who were on the payroll as at 23 September 2020 are covered. This means a Real Time Information (RTI) submission must have been made to HMRC in respect of the employee on or before 23 September 2020. Anyone who was an employee for tax purposes is eligible including workers, casuals, zero-hours employees, officeholders, salaried LLP members, directors and apprentices, provided they are paid via PAYE and were on payroll as at 23 September 2020.

Employees who ceased employment after 23 September 2020 can be rehired and placed on the JSS, provided they meet the other eligibility criteria for the scheme. Employees acquired under TUPE after 1 August 2020 can also be placed on the JSS.

Employees will need to be working at least 20% of their usual hours to be eligible for JSS Open or to have ceased working for at least seven consecutive days to be eligible for JSS Closed. Employees do not have to have been previously furloughed under the CJRS to be covered under the JSS. 

Employees must work at least 20% of their usual hours and be paid by the employer their usual pay for those hours. Training during working hours which is paid for by the employer at the employee's usual full rate of pay counts towards the 20% minimum working hours. There is no requirement in the Government guidance on the JSS for employees to be carrying out their "normal" or "contractual" duties for the 20% working time, so employers have the flexibility to assign work as required.

The employer must also pay 5% of the employee's usual pay for hours not worked up to a cap of £125 per employee per month. The Government then contributes 61.67% of the employee's usual pay for the hours not worked, capped at £1,541.75 per employee per month.

By way of example, an employee who normally earns £1,100 per month who works 20% of their hours under the JSS would be paid £220 by their employer for hours worked. For hours not worked, the employer would pay £44 and the Government would fund £543, so that the employee receives £807 in total.  In percentage terms, the employer pays 24% of wages, while the Government contributes 49% so the employee receives 73% of their normal wages.

The employer must pay the wages for the worked and unworked hours upfront in the normal payroll (including the Government contribution) and claim the Government contribution in arrears at the end of the month.

The employer must agree a JSS Open temporary agreement for reduced hours with the employee (or collectively with a trade union where the relevant terms are governed by collective agreement). This temporary working agreement must cover at least seven consecutive days. The employer will need to keep a record of this for five years which can be produced to HMRC on request. 

The temporary working agreement must be in writing and must be agreed with the employee but there is no need to have a response from the employee confirming their agreement. This leaves open the possibility for employers to rely on implied consent in appropriate circumstances. However, the written temporary working agreement must be in place before the start of the relevant period of reduced hours.

The temporary working agreement does not have to prescribe the number of hours for the employee to work – the employee's hours can vary over the course of the agreement, provided the employee works at least 20% of their usual hours across a claim period.

Where the employer does not top up pay, the reduction in pay under the JSS will constitute a change to terms and conditions of employment and the normal rules about changing terms and conditions would apply (i.e. the employer must seek the employee's consent and an employer looking to impose the change unilaterally could potentially trigger a duty to consult collectively with recognised trade union or elected employee representatives).

Yes. The employer can move employees on and off the scheme and change working patterns, but any temporary working agreement needs to last at least seven days at a time and a change to the working pattern would need the employee's agreement. 

For employees who have fixed contractual hours, the employee's usual hours will be their normal contractual hours at the end of the last pay period ending on or before 23 September 2020 or 19 March 2020, whichever is greater. The intention is that a temporary reduction in hours as a result of COVID-19 should not be taken into account. However, if there has been a permanent contractual reduction to the employee's hours, then the hours in the last pay period ending on or before 23 September 2020 must be used.

For employees whose hours or pay vary, the employee's usual hours will be the higher of:

• the average number of hours worked in the 2019/20 tax year;
  
  
• the hours worked in the corresponding period within the 2019/20 tax year; or
  
  
• the average number of hours worked from 1 February 2020 until 23 September 2020.

The employer will then need to calculate the number of actual hours worked in the claim period as against the total number of usual hours in the relevant claim period. Any holiday taken during time that would otherwise be working hours counts towards the total number of hours for the purposes of the 20% minimum threshold.

For employees who have a fixed salary, the employee's usual wages are the greater of the wages payable to the employee in the last pay period ending on or before 23 September 2020 and the wages payable to the employee in the last pay period ending on or before 19 March 2020. Again, the intention is that any reduction in pay as a result of COVID-19 should not be taken into account.

For employees whose pay varies, the usual wages will be the higher of:

• the wages earned in the same calendar period in the 2019/20 tax year;
  
  
• the average wages payable in the 2019/20 tax year;
  
  
• the average wages payable from 1 February 2020 to 23 September 2020.

The JSS covers regular payments such as contractual overtime, fees and contractual commission (not just salary) but tips, non-cash benefits, discretionary bonuses and discretionary commission are excluded.

JSS Closed is only available to employers who are legally required to close as a direct result of COVID-19 restrictions set by one or more of the four UK governments. This includes employers who are restricted to delivery or collection services or outdoor services under Health Protection Regulations. Where only part of the business is required to close, the employer can claim for employees working in that part of the business. However, employers who close their business premises voluntarily or who close their premises due to a COVID-19 outbreak are not eligible for JSS Closed. 

For JSS Closed, the Government will contribute two thirds of normal wages, up to £2,083.44 per employee per month, for any employee who cannot work due to the closure.

The employer must pay the Government contribution upfront in the normal payroll and claim reimbursement from the Government in arrears on a monthly basis. Under JSS Closed, employers are not required to contribute anything towards the employee's wages but will be required to cover employer NICs and employer pension contributions on the total amounts paid to employees.

The employer must agree a JSS Closed temporary working agreement with the employee (or collectively with a trade union where the relevant terms are governed by collective agreement). This temporary working agreement must require the employee to stop work for at least seven consecutive days. The JSS Closed temporary working agreement must be in place before the relevant cessation of work begins. The employer will need to notify the employee of the agreement in writing and keep a record of this for five years which can be produced to HMRC on request.

Where the employer does not top up pay, the reduction in pay under the JSS will constitute a change to terms and conditions of employment and the normal rules about changing terms and conditions would apply (i.e. the employer must seek the employee's consent and an employer looking to impose the change unilaterally could potentially trigger a duty to consult collectively with recognised trade union or elected employee representatives).

Employees on a JSS Closed temporary working agreement cannot do any work which makes money or provides a service to the employer or an associated employer. However, they can take part in training or volunteer for another organisation.

Yes. Whether claiming under JSS Open or JSS Closed, the employer can top up the employee's wages above the minimum level of pay required at their own expense if they wish.

The JSS does not cover employer national insurance or pension contributions and employers will have to continue to pay these at their own cost. Employers will be liable for employer national insurance and employer pension contributions on the full amount paid to employees, including any Government contribution under both JSS Open and JSS Closed.

Employers must also deduct income tax and employee national insurance contributions on the full amount paid to the employee in the usual way, including any Government contribution. If applicable, student loan deductions and the apprenticeship levy must also still be paid.

Yes. Employees cannot be made redundant or given notice of redundancy while their employer is claiming for them under the JSS. However, the employer could take the employee off the JSS and then make them redundant (subject to the usual rules on redundancy). The employer could also make other employees redundant who are not being claimed for under the JSS.

JSS grants cannot be used to fund redundancy payments or any part of the employee's notice period.

Yes. HMRC will retain the right to audit claims under the JSS with the scope to claw back amounts in error and impose penalties for fraudulent claims. Employers must therefore keep records of any agreements or arrangements with employees under the JSS. These must be kept for at least five years and must be made available to HMRC on request. In addition, employers must keep records of how many hours employees work, where JSS Open is used, and the number of usual hours they are not working. Employers should also keep a record of their reasons for using the JSS and, where relevant, the rationale for claiming for some employees and not others.

For large employers, it is also advisable to keep a record of how they meet the financial assessment required under JSS Open.

Yes. The Government guidance in relation to holiday states that:

• holiday continues to accrue at the usual rate during the JSS (ignoring any reduction in hours) – although it is permitted for an employer and employee to agree to vary holiday entitlement provided statutory minimum allowances are adhered to;
  
  
• holiday can be taken whilst on the JSS but pay will need to be topped up by the employer to normal full pay (employers will be able to use the Government funded element to contribute towards holiday pay, so will only have to top up above this);
  
  
• where bank holidays fall during the JSS and the employee would normally have this off, they can take the bank holiday off and the employer would have to top up to normal full pay or the employer can give a day off in lieu instead.

Holiday can be taken at any time the employee is on the JSS. For employees on JSS Open, this means holiday can be taken during their working hours or hours not worked.

The Government guidance suggests that an employee cannot be on the JSS if they are on sick leave or in receipt of SSP. For JSS Closed, it seems that the employer would have the option of leaving the employee on the JSS and continuing to claim for them or moving them onto sick leave instead (and paying company sick pay or SSP). For JSS Open, the position is more complicated. Under JSS Open, the employee has to work at least 20% of their normal hours across a claim period. If the sickness absence reduces the employee's working hours below 20% across the claim period, the employer would not be able to claim in respect of that employee.

HMRC intends to publish the names of employers who have used the JSS, so that employees and members of the public can report fraud. There is also likely to be press interest in which employers use the JSS.

Employers who are visa sponsors cannot reduce the salary of a sponsored employee if this would take the employee's pay below the rate set by the Home Office for the employee's particular role. When the CJRS was announced, the Home Office issued guidance which, exceptionally, allowed sponsored employees to be placed on furlough and have their salaries reduced to 80% or £2,500 per month (whichever was lower). The Home Office has not yet issued guidance in relation to the JSS. Until it does, employers must ensure that the amount that a sponsored employee receives under JSS arrangements does not take the employee's pay below the rate set by the Home Office for the employee's particular role. The employer should also report the reduced working hours or cessation of work, the expected duration and the reduction in pay to the Home Office in order to comply with its sponsorship duties.  

For further information on the government support measures available for business, please see our briefing note on the Covid-19 resources page of our website. If you would like to discuss any aspect of the JSS or its impact on your business, please get in touch: