Job Support Scheme Expanded – Furlough Continues for Some Employers
The Government has announced an extension to the Job Support Scheme for those business that are required to close due to Covid-19 restrictions.
The Job Support Scheme (JSS) is the replacement to the Coronavirus Job Retention Scheme (the furlough scheme) which is due to end on 31 October 2020. The JSS was originally designed to 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 still applies. 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 as the workplace had closed. For those employers, the JSS in its original guise would have little or no benefit. The extension of the JSS is designed to assist those employers.
The main aspects 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
- Whilst the business is closed due to the restrictions, employees are effectively furloughed
- The Government pays two thirds of each employees salary up to a maximum of £2,100 per month. As with the original furlough scheme no doubt 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 seven 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) with a review point in January.
No doubt, the expansion of the JSS to those businesses that are required to close due to lockdown restrictions, will be of welcome assistance. Whist 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.
If you require any further details on the expansion of the JSS, please contact Moorcrofts Employment Partner, Matt Jenkin.