The government has announced a new scheme that will replace the Job Retention Scheme. It is called the Job Support Scheme and is set to begin on 1 November 2020.
What is the Job Support Scheme?
The scheme has been put in place to assist financial support to employers who need it but at a reduced rate to the Job Retention Scheme.
Until the 31st of October 2020 employers will be able to claim wage assistance of up to 80% of an employee’s wages if the employee was unable to work at all because of COVID-19, and to try to avoid redundancies. On the 1st of November 2020 the new JSS (Job Support Scheme) will come in to force. This will still provide help towards wages to support employers, however its principal aim to help employers support employees dong some work but need more time to recover. The main difference between the 2 schemes is that if your employee is doing no work neither they nor you will receive any wage assistance.
Employers of any size with a UK bank account and PAYE scheme will be eligible to use the JSS. Larger businesses will need to meet a financial assessment to show that their turnover is lower now that before due to COVID-19.
The good news is that the scheme is open to employers who did not use the Job Retention Scheme to furlough employees before as well as to those who have.
The Chancellor also introduced the Job Retention Bonus scheme to provide employers with £1000 for each furloughed employee they continue to keep employed until the end of January 2020.(there are other criteria to meet on this – if you want to know more please connect with us)
In order for you to enter an employee into the JSS, they must have been on the your PAYE payroll on or before 23 September 2020 which means that a Real Time Information (RTI) submission notifying payment to the employee to HMRC must have been made on or before 23 September 2020.
Quite simply – An employee’s wages, when on the JSS, will be funded partly by the employer and partly by the Government. Employers need to pay employees for the hours they work, which must be at least one third of their normal working hours. The employer must also pay the employee for one third of the amount of ‘lost hours’ – ie the hours the employee would normally work but is not working. The Government will then provide pay for one third of the number of lost hours up to a maximum cap of £697.92 per month. (the employee should get 77% of their normal wages).
If you put an employee on to the JSS you are still able to cycle them on and off the scheme. Additionally there is no requirement for the employee to work the same number of hours each month as long as they meet the minimum working hours requirement. It is important to note though that each reduced working hours agreement must last for 7 days.
Funds will be paid in arrears to reimburse the employer for the Governments third on a monthly basis and online from December 2020.
For more up-to-date information, please contact claire@flex-consultancy.co.uk