Employment Law: Job Support Scheme Expansion
Employment Lawyer and guest blogger Matt Jenkin looks at the recently announced expansion to the Job Support Scheme.
The Job Support Scheme is the replacement to the Coronavirus Job Retention Scheme which is due to end on 31 October 2020. The JSS was originally designed to only assist businesses that were facing a low demand over the winter months, and requires an employer to contribute to wage costs. This element of the scheme remains available to UK businesses.
However, for those businesses that are forced to close to comply with local or national restrictions, it wasn’t a case of “reduced demand”, but rather “no demand” given that the workplace had been required to close. For those employers the JSS - in its original guise - would have little or no benefit. Hence the announced extension of the JSS which is designed to assist this particular grouping of employers.
The main aspect of the expanded scheme are:
- The scheme will cover businesses that, as a result of the restrictions, are legally required to close their premises. This can be due to local or national restrictions that are put in place across the United Kingdom;
- Whilst the business is closed due to the restrictions, employees are effectively furloughed;
- The Government pays two thirds of each employee’s salary up to a maximum of £2,100 per month. As with the original furlough scheme it is to be expected that employees will need to agree to this salary reduction. However faced with the alternatives, employees are, as with furlough, likely to agree;
- Employers will not be required to contribute to the wage costs of the employees but will be expected to cover employer NICs and pension contributions;
- Payment will be made via a claim to HMRC, with the claims service available from early December;
- Employees will need to be furloughed for a minimum of 7 consecutive days at any given time;
- The scheme will begin on 1 November 2020 (at the same time as the original elements of the JSS) and will run for six months, with a review point in January.
For those businesses required to close due to lockdown restrictions the expansion of the JSS will be welcome. Whilst it is being badged as an expansion of the JSS, it does feel more like a continuation of the furlough scheme with employees doing no work (as a result of the business being required to remain closed) and no obligation on the part of the employer to pay wage costs other than NICs and pension contributions.
This expanded element of the scheme will only be of interest to employers who are required to close due to COVID-19 restrictions. However, with local restrictions ever expanding and the risk of new national restrictions, it could be utilised by many more employers in the months ahead.
For more information on any of the topics covered, please contact Matt Jenkin ([email protected]) directly, or contact your usual Howden Consultant.
Please note that information and any commentary contained in this article is provided for information purposes only and does not, and is not intended, to constitute legal advice to any person on a specific case or matter. Every reasonable effort is made to make the information accurate and up to date, but no responsibility and correctness or for any consequences of relying on it, is assumed by the author or its publisher.
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