Update: "Job Support Scheme" announced by UK Chancellor

 Job Support Scheme

The JSS, which is similar in concept to short-time working schemes in France and Germany, seeks to directly support the wages of employees in work and gives employers who face depressed demand the option of shortening employee hours rather than making redundancies.

Eligible Employees

JSS funding will be available for employees in “viable jobs”. Employees must be working at least 33% of their usual hours in order to be eligible for the government contribution. There is no requirement for employees to have been previously placed on furlough under the CJRS and firms that did not apply for CJRS support will be able to apply for JSS protection.

The JSS is not specific to particular sectors and is open to all SMEs, but larger businesses will only be eligible if their turnover has fallen through the COVID-19 crisis. We await detail on applicable thresholds that would bring larger businesses under the ambit of the JSS.

Government Contribution

Employers will pay eligible employees for the shortened hours that they work. For the remaining hours not worked, according to a tweet from HMRC (which is not altogether compatible with the Chancellor’s statement), the Government will contribute and the employer shall each pay one third of the employee’s remaining wages. The employee will forgo the final 1/3rd.

An employee that worked 33% of their normal hours would therefore receive at least 77% of their pay – 55% paid for by their employer and 22% paid for by the Government.

The level of top-up grant available will be calculated based on employee’s usual salary (subject to a cap which we believe will be approximately £38,000 per annum) meaning that the contribution by the Government under the new scheme for an employee who only works 33% of their normal working time will be £697.92 per month.

Memery Crystal Comment

The main difference from the CJRS is that the JSS will only be applicable for employees who work (and are paid) for at least 33% of their normal working hours. There is therefore a recognition that the jobs of those employees who remain on full furlough leave at the end of the CJRS cannot be saved.

The level of Government support to the wages of eligible employees is also significantly lower than under the CJRS, with a maximum contribution of 22% under the JSS rather than 60% (in October) under the CJRS.

We await further guidance to be published by the government on the JSS and will provide updates once this is available.

If you have any further queries about the JSS, please get in touch with our Employment Team.