Initially, when the JSS was announced, the business will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction). The aim is to ensure that as many workers keep their job. In recent days, the scheme has been expanded to support businesses required to close as a result of coronavirus restrictions.
Under the initial scheme, the Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped. Under the expanded scheme, where businesses have to legally close, the Government will pay two thirds of each employees’ salary, up to a maximum of £2,100 per month.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
All employers with a UK bank account and UK PAYE schemes can claim the grant and it should be noted that neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.
Another important point to note is that large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium enterprises (SMEs).
In relation to employees, they must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
There will be flexibility with the scheme and employees will be able to register on and off the scheme and they do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of seven days.
“Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Employees who have previously been furloughed, will have their underlying usual pay and/or hours used to calculate usual wages, not the amount they were paid whilst on furlough.
The scheme will be open for claims from 1 November 2020 to the end of April 2021. Employers will be able to make a claim online through Gov.uk from December 2020 and they will be paid on a monthly basis. The grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via an RTI return.
Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.
The advice in this column is specific to the facts surrounding the questions posed. Neither FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.