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Coronavirus Job Retention Scheme extended and Guidance on Job Support Scheme Published
On 31st October the government announced that The Coronavirus Job Retention Scheme has been extended for a month. On the same date, detailed information was published on the new Job Support Scheme which has now been postponed from the original start date.
Extension of the Job Retention Scheme
Under the terms of the Coronavirus Job Retention Scheme (CJRS) extension, employees will continue to receive 80% of their usual pay for hours not worked, up to a maximum cap of £2,500. Employers will retain the flexibility to bring furloughed employees back to work on a part-time basis (flexible furlough) or furlough them full-time (full furlough). The government will pay the 80% and employers will only be required to cover employers’ NI and pension contributions for furloughed hours, effectively the same level of CJRS grant as applied in the month of August. Employers must continue to pay the employee for any hours worked in the normal way.
The other key highlights are:
At the time of publication, it’s not clear yet whether the extended CJRS will cover just the calendar month of November, or whether it will run until 2 December, which is the date when the new national restrictions are due to end.
The commencement of the Job Support Scheme (JSS), which comprises JSS Open (for open business premises) and JSS Closed (for closed business premises), has been postponed until the CJRS ends. The JSS will then be introduced following the end of the CJRS.
Further guidance, including on how to claim the extended CJRS support through an updated claims service, is expected to be published shortly.
In summary, furlough can be flexible or full and the government will then fund 80% of employees’ usual pay for their furloughed hours, subject to a cap of £2,500. Employers only need to pay employers’ NI and pension contributions on that furlough pay, plus employees’ contracted wages for any worked hours. The Job Support Scheme has been postponed and will now be introduced after the extended CJRS ends.
Guidance on the Job Support Scheme
The JSS provides a partial contribution to wages for employers whose operations are affected by the COVID-19 pandemic. The JSS is split into the “JSS Open” which applies to businesses that are able to remain open but face reduced demand and “JSS Closed” which applies to businesses who are legally required to close their premises as part of local or national restrictions.
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.
Under 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.
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 Government guidance provides important clarity for businesses as to how it will operate and what the requirements are in practice.
The guidance confirms that:
The temporary working agreement does not have to prescribe a certain number of hours that the employee must work but to be eligible for the JSS the employee must work at least 20% of their usual hours. The Government has confirmed that it will publish a checklist of what the temporary working agreement should include by 6 November but the checklist will not be mandatory and businesses can use their own format.
The test to determine whether a business is a “large employer” (i.e. having 250 or more employees as at 23 September) is calculated on an entity by entity basis so will not be inclusive of group company data.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Employment Team at Cleaver Fulton Rankin for further advice or information.
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