Job Support Scheme - what does it mean for employers?

The scheme will be open to small and medium employers, regardless of their financial position. Large employers will be eligible if their turnover has fallen due to the pandemic. We are awaiting details of what will constitute a small, medium or large employer and how a fall in turnover will be defined and over what period. For some employment laws, the number of employees is the relevant measure (typically 250 or more is a large employer) but in company law other factors are taken into account such as turnover and balance sheet, so we may see one or more of these forming part of the test. Larger employers who are eligible for the JSS would not be permitted to make shareholder distributions whilst using the scheme.

Employers can use the JSS whether or not they previously used the furlough scheme. 

The key features of the JSS are:

• Employees must work at least one third of their usual hours (paid by their employer as usual) (we are assuming that they will actually need to be given work rather than just pay, but await clarity on that and whether it will need to be their normal duties)
  
  
• Employees will be paid for two thirds of their unworked hours at their usual hourly rate (with the cost shared between the employer and the Government)
  
  
• The employee's usual hourly rate would be calculated using similar methods as used under the furlough scheme
  
  
• Employers would have to agree reduced hours with the employee, and notify them to the employee in writing (in a similar way to agreeing furlough arrangements)
  
  
• The Government contribution would be capped at £697.92 per month per employee and will not cover employer national insurance contributions or pension contributions
  
  
• Employees can cycle on and off the scheme, but any reduced hours arrangement needs to last at least 7 days at a time
  
  
• The employee must be on the payroll at 23 September (i.e. the employer made an RTI submission to HMRC in respect of the employee on or before 23 September)
  
  
• Employers will not be able to make employees redundant during the time they are claiming for them under the JSS (but they could make other employees redundant if they are not claiming under the JSS in respect of them)
  
  
• Employers retaining previously furloughed staff on reduced hours will be able to use the JSS and claim the Job Retention Bonus as well
  
  
• The JSS will run for 6 months from 1 November, and the 33% minimum hours requirement will be reviewed after the first 3 months of the scheme
  
  
• Employers may claim under the scheme from December, and claims should be made on a monthly basis

So for example, an employee who usually works 36 hours a week, could under the JSS work 12 hours a week (paid as normal by the employer) and be paid for 16 unworked hours (with the cost shared equally between the employer and the Government). The remaining 8 hours would be unpaid. In financial terms, the employee would be paid approximately 78% of their usual salary for working 33% of their hours. The employer's cost would be 56% of the employee's usual salary, with the Government adding a contribution of 22%. 

We are expecting detailed guidance about the JSS to be published in the coming weeks and will provide further information when we receive it. If you would like to discuss the implications of the scheme for your business, please get in touch with your usual Employment team