We look at the Job Support Scheme and how it will work following The Chancellor's announcement relating to the Winter Economy Plan.

JSS Summary 

• As part of the Winter Economy Plan, JSS is a scheme introduced to combat the inevitable job losses that will ensue once the furlough scheme comes to an end at the end of October 2020.
• The Chancellor emphasised that the JSS is different to the furlough scheme as it targets support on those businesses that need it most and is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, with the aim of keeping employees attached to the workforce. 
• Employers will continue to pay their employees for time worked, but the burden of hours not worked will be split between the employer and the government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
• The scheme will begin on 1 November 2020 and continue for six months until the end of April 2021. 
• Large businesses will have to meet a financial assessment test, so that the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19.  The government also expects that large employers using the JSS will not be making capital distributions, such as dividend payments or share buybacks whilst accessing the grant.  There will be no financial assessment test for small and medium enterprises (SMEs).  
• There is no requirement for employers to have used the furlough scheme in order to take advantage of the JSS.  Employers using the JSS can also take advantage of the Job Retention Bonus Scheme which is being introduced after the end of furlough scheme.
• During the period in which any employer is using JSS, they cannot make employees whose salaries are being supported by the scheme redundant or put them on notice of redundancy. This is one of the key differences between JSS and the furlough scheme. 
• 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 is a clear indication that the reduction in hours must be agreed by the employee and this must be put in writing and notified to the employee. 
• Another key difference with the furlough scheme is that the payment being supported by JSS will be paid "in arrears". This marks a crucial departure from the furlough scheme which allows employers to submit their claim 14 days in advance of their payroll. According to the Treasury Factsheet, "Grants can only be used as reimbursement for wage costs actually incurred". This will likely reduce the scope for fraudulent use of the scheme. 

How will it work? 

• For the first three months of the scheme, an eligible employee must work at least 33% of their usual hours.  However, after three months, the government will consider whether to increase this, when the minimum hours threshold may increase. 
• For the time worked, the employee must be paid their normal contracted wage. For the time not worked, the employee will be paid up to two-thirds of their usual wage, each third being funded by the government and the employer. The government's contribution per month will be capped at £697.92. 
• The calculations for “usual wages” will follow a similar methodology as used for the Coronavirus Job Retention Scheme, with full details to be set out in guidance to follow. 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.
• Employees must be on an employer's PAYE payroll on or before 23 September 2020 meaning an RTI submission to HMRC must have been made on or before 23 September 2020. 
• The grant will not cover Class 1 employer NICs or pension contributions, which will remain payable by the employer. 
• Employers can rotate staff in and out of JSS which means employees do not have to work the same working pattern each month but each short-time working arrangement must cover a minimum of seven days. 
• A worked example is included in the Treasury factsheet, as well as a useful table which summarises what percentage of payments will be due from the employer and the government where an employee is working 33%, 40%, 50%, 60% or 70% of their usual hours.

Detailed guidance 

• According to the Treasury Factsheet, detailed guidance is to be published shortly. 
• We will keep you fully posted in the coming days.