Update (Oct. 27, 2020) – HM Revenue & Customs released further details on the UK Job Support Scheme (JSS). The JSS will now be scaled up and expanded to further support businesses adversely affected by COVID-19 and the associated lockdown restrictions. For more details, please see our alert.
The UK government announced on 9 October 2020 an expansion of the Job Support Scheme (Expanded JSS) to support workers and businesses through the continuing public health crisis. Businesses which are forced to close because of COVID-19-related restrictions, will be able to apply through the Expanded JSS for up to two-thirds of workers’ pay, in respect of the time that those workers cannot work, subject to a cap of £2,100 a month per worker. The Expanded JSS will run from 1 November 2020 until 30 April 2021.
The government has said the Expanded JSS is not directed at all businesses affected by the pandemic, but is intended to provide a safety net for workers employed by businesses which are legally required to close their premises in response to COVID-19. Therefore, the take-up of the Expanded JSS will likely depend on where and when COVID-19-related restrictions are imposed, with eligibility for the Expanded JSS dependent on those restrictions remaining in place. To be eligible, workers must be unable to work because of those restrictions for a minimum period of seven days and be employed and have a notification of payment submitted through Real Time Information to HM Revenue & Customs (HMRC) on or before 23 September 2020.
Unlike the original JSS (see McGuireWoods’ previous alert), under the Expanded JSS, employers do not have to contribute toward pay for workers, but are required to pay employers’ National Insurance and pension contributions. Businesses will be able to apply for grants in arrears under the Expanded JSS through HMRC from early December 2020.
Under the previously announced JSS, from 1 November 2020, workers in “viable” jobs who can work at least one-third of their normal working hours will be able to have a third of the balance of any hours they cannot work paid by the government and another third paid by their employer, with workers forfeiting pay in respect of a third of the hours they cannot work because of COVID-19, capped at £697.92 per month per worker; i.e., a worker will be remunerated up to 77 percent of normal pay, assuming that worker is paid £38,000 or less.
Accordingly, those workers earning £38,000 per annum or less who are unable to work at all because of COVID-19 will receive approximately 10 percent less pay under the Expanded JSS than those workers who are able to work at least a third of their normal working hours under the original JSS.
The UK government also announced that, as part of the Expanded JSS, cash grants for businesses required to close because of local or national lockdowns will increase to up to £3,000 per month, payable by equal installments every two weeks.
The operation of the Expanded JSS and the original JSS are both subject to review in January 2021. Claims under both can be made in addition to claims for the UK Job Retention Bonus, whereby businesses can claim a £1,000 taxable bonus in respect of each worker previously furloughed under the Coronavirus Job Retention Scheme who remain continuously employed until 31 January 2021.
More detailed guidance on both the JSS and its expansion are anticipated to be released in due course.
More information on the announcement of the JSS is available in the JSS fact sheet. For advice in relation to the JSS, its expansion or the Job Retention Bonus, please contact either Dan Peyton or Adam Penman.
McGuireWoods has published additional thought leadership analyzing how companies across industries can address crucial business and legal issues related to COVID-19.