Open & Closed Job Support Schemes
27 October 2020
It’s a measure of how rapidly the COVID-19 pandemic has re-established itself across the United Kingdom that the Chancellor of the Exchequer, Rishi Sunak, announced further changes to his job support package for employers and employees last week.
As followers of this blog will be only too aware, the original support for “furloughed” employees was provided via the Job Retention Scheme (JRS), which has been tapered since July, and is due to end in just a few days’ time (31/10/20). In September the Chancellor was keen to move from that level of support to a lighter-touch and lower-cost system called the Job Support Scheme (JSS). This was designed to assist employers who are able to continuing trading, but often with lower customer demand owing to the dual challenges of the pandemic and social distancing.
Yet since the original announcement of the Job Support Scheme circumstances have once again changed rapidly and significantly.
More support now needed
On the 12th October the Prime Minister announced the new “three tier” plans for England, with many employers in Tier 3 required to undertake another period of temporary closure. And other regional governments have also had to consider and/or enact enforced closures too, one of the most recent being the Welsh government’s “Firebreak” closedown which began last Friday evening.
Unfortunately the original JSS was not designed to support employers and employees in this more extreme closed environment, and that has now led to the JSS proposals being developed further by the Chancellor and his Treasury team.
The new proposals are now broken into two layers of pandemic wages support – the “open” scheme where employers are able to employ workers for a reduced number of hours, and the “closed” scheme designed to provide support where employers are forced to close as a result of local or national lockdowns.
The above links to the government factsheets provide the detail on both schemes, and more information and guidance will be provided over the coming weeks. And this link to the Personnel Today magazine website also provides a useful chart that compares the various schemes announced since the start of the pandemic, as well as some useful background reporting on the arguments for and against many of the component parts of the support offering.
Some useful points to note
The detail of the COVID-19 wages support landscape in the UK is now becoming increasingly complex, and which scheme (or schemes) employers use will no doubt be driven by their individual circumstances and location(s). We would however urge employers to take professional legal and/or payroll advice if they are unclear as to any of the JSS details.
There are however three key points that fall into the Employee Benefits space that we feel are worth making in this post:
- In all three schemes (the current version of the JRS, the “open” JSS, and the “closed” JSS) employers are required to pay National Insurance contributions and minimum pension contributions. Employers should ensure that they continue to meet all their duties, and in particular any legal requirements under Auto-Enrolment pension legislation. For more information please visit The Pension Regulator’s website or visit our COVID-19 Employee Benefits hub.
- Both JSS schemes include the proviso that “employees cannot be made redundant or put on notice during the period within which their employer is claiming the grant for that employee”. It follows that contractual employee benefits may have to continue until such time as employers are able to make decisions in this space, and employers may also want to consider how they support workers – and meet their duty of care – for those employees who might sadly need to be made redundant in the months ahead (please see this animation for our services in this area).
- Although the new JSS is significantly more generous than its earlier predecessor, both schemes provide less financial support than the original JRS scheme (please see this simple comparison from the BBC website), which in turn paid less than full pre-crisis income also. Employers can opt to “top up” employee pay if they wish, but it is to be expected that many will not be in a financial position to do so. So it follows that, the longer the crisis persists, the more likely workers supported by the JSS may find their household finances deteriorating. Employers should therefore continue to offer support in the area of financial wellbeing and debt counselling advice wherever possible.
For more information on any of the above topics, please speak to your usual Howden Consultant in the first instance, or visit our website for other contact options. For the latest details on COVID-19 & Employee Benefits provision please visit our coronavirus hub.
Steve is Head of Benefits Strategy, Howden Employee Benefits & Wellbeing, and is an award-winning thought leader on Pensions, Employee Benefits, and Human Resources issues. He is occasionally accused of making Employee Benefits interesting.