Who could ever have imagined that payroll would get so exciting during a pandemic? Another day, another new scheme delivered by your ever-friendly employer (yes, that means you!)
The Job Support Scheme
So step up ‘Job Support Scheme’ (JSS) not to be confused with the Job Retention Scheme version 1 or version 2 and not to be confused with the Job Retention Bonus Scheme. It commences on 1st November with claims being submitted from 1st December. We are still lacking detailed guidance (expected to be issued late on a Friday evening within a couple of weeks of launch date) but below are some pointers to give you a feel of what it might do (or not) for your business.
The point of the JSS is to support employees in ‘viable’ jobs where you cannot supply enough work to keep them fully productive in the short-term. The principle is that you will provide them some hours of work for which you will pay them, you then cover the cost of a proportion of hours not worked which is matched by the government through a grant. The employee forgoes a proportion of their pay too. We have no detailed guidance yet for monthly staff (sorry!) but we have got a weekly pay illustration:
Employee contractually works 37.5 hours a week and gets £350. You reduce her to 12.5 hours a week (33%). The remaining unworked proportion of her wages (67% or £234) is split into thirds of £78 each. Of those thirds, one is covered by you, one is covered by the government grant and one is forgone by the employee.
So the employee gets £272 instead of £350. You pay her £272 (plus employer national insurance and any pension arising) but then claim £78 of that back from the government.
The rules as we know them so far
- you must provide work for the employee for at least 33.33% of their usual hours of work (under their latest employment contract) and the employee must work them;
- the employee must have been employed AND submitted on an RTI submission to HMRC by November 23;
- you need to be able to demonstrate that the business has been negatively impacted whilst at the same time demonstrating that the job remains viable in the medium term;
- the employee does not need to have been previously furloughed and you will still be able to make them redundant if the job ceases to be viable but cannot claim any JSS if notice of redundancy has been given;
- you do not need to have previously used the furlough scheme (JRS);
- Government grant will not exceed £697.92 per employee per calendar month;
- each short-term working pattern must be in place for each employee for at least 7 days;
- claims can only be made monthly and fully in arrears (not in anticipation of pay day as was permitted under JRS), and
- scheme runs to the end of April but rules subject to change at the end of January.
So is it worth it?
In order for this to make commercial sense, you may want to consider if you have got enough viable work to keep this employee busy for AT LEAST 33% of their usual time AND incur an additional 22% levy of for hours not worked. In other words, is the role still viable if I pay a premium for the work performed?
A wider consideration of course is about the future – how critical is it for me to keep this person in my business in the medium term? This is particularly difficult with so little certainty about future trading prospects.
It also raises questions for the employee – can they afford to take a pay cut of up to 22% or should I just re-negotiate their contract based on fewer hours? This could knock on to impact working tax credits and/or other benefits that they might claim.
To help us help you with JSS it would be useful to get a feel for how many of you might want to utilise this scheme so if you can respond to this email with a Yes, No, Maybe it would be really helpful.