The JSS will provide ongoing wage support for people in work BUT only if:

• The employee is working at least 33% of their “usual hours”;

• The employer meets certain conditions; and

• The employer pays for both the hours that the employee works and contributes towards the hours that the employee is not working.

Under the CJRS, employers could claim a grant for its employees who were furloughed and not doing any work at all. The JSS, however, requires employees to work at least 33% of their usual hours (note: such minimum threshold may be increased from 1 February 2021). For every hour not worked, the Government will pay 1/3 of the employee’s usual pay (capped at £697.92pm) BUT, as set out above, ONLY IF the employer pays for the hours the employee has worked and also pays 1/3 of the employee’s usual pay for each hour not worked. This means that employees will earn a minimum of 77% of their normal wages (where the Government contribution has not been capped). The percentage that the Government will contribute depends on the proportion of hours not worked.

• It is available to employees who are on the employer’s PAYE payroll on or before 23 September 2020. This means RTI must have been made before this date.

• The JSS will run from 1 November 2020- 30 April 2021 (i.e. it starts straight after the CJRS ends).

• It is available to businesses in all sectors.

• Whilst all SMEs who have a UK bank account and UK PAYE scheme are eligible, large employers will only be eligible if they can show that their business has been affected by Covid (details to follow). It is expected that large employers will not be eligible for the JSS if they are making capital distributions (e.g. dividends or share buybacks) whilst using the JSS.

• Employees cannot be made redundant or put on notice of redundancy during any period that an employer is claiming the JSS for them. However, an employee can be moved out of the JSS to be made redundant.

• Employees can also cycle on and off the JSS and do not have to work the same pattern each month. However, each short-time working arrangement must last a minimum of 7 days.

• JSS payments will be made in arrears and so employers need to pay the Government contribution upfront and will then be reimbursed. This is different to the CJRS grant.

• The JSS grant will not cover Class 1 NICs or pension contributions and so the employer remains liable for these sums.

• “Usual wages” will be calculated in a similar way as they were under the CJRS.

• Employers do not need to have used the CJRS to claim under the JSS.

• Employers can claim the Job Retention Bonus as well as the JSS.

• Employers who wish to make use of the JSS will need to agree a reduced working arrangement with the employee and notify them of that in writing (in the same way as employees did with furloughed employees when they were not topping up to full pay).

• First JSS claims can be made from December 2020.

• HMRC will check claims.

• If there is no work for employees to do then employers cannot use the JSS. The aim of the JSS is to protect viable This means that redundancies are still likely in some sectors e.g. entertainment, hospitality and leisure where there continues to be no work (or less than 33% of usual hours’ available).

• Since the JSS is only available to employers who contribute the additional wage costs, might we find that employers do not utilise the JSS but, instead, look to negotiate reduced working hours with employees (so that they only have to pay for hours worked)?

• How will employers decide which employees will have access to the JSS? Or will they open it up to all currently on furlough?

• Section 3 of the Government JSS Factsheet says that the expectation is that employers “cannot top up their employees’ wages above the 2/3 contribution to hours not worked at their own expense” (we wonder if that should say “can” top up, like with the CJRS?)

• We cannot see how the JSS will encourage firms to avoid redundancies by cutting hours because the requirement for the employer to pay the 1/3 additional wage cost of hours not worked means that it is cheaper for firms to employ 1 person full-time than 2 people part-time.

• However, because the JSS can be combined with the Job Retention Bonus Scheme, we can see how there is an incentive for firms to retain workers until they qualify for the bonus at the end of January 2021.

• Beth works 5 days a week and earns £350 per week (which equals £70 per day).

• Her employer is suffering reduced sales due to Covid but does not want to make Beth redundant.

• Instead, her employer puts Beth on the JSS and asks her to work 2 days a week (which is 40% of her usual hours and so meets the minimum 33% hours threshold).

The payments to be made to Beth are as follows:

• Her employer must pay Beth £140 for the 2 days she works (£70 x 2).

• For the 3 days she is not working (when she would normally earn £210 (£70 x 3)):

  • The Government will give a grant to her employer of £70 (i.e. 1/3 of the hours Beth has not worked)- but this will be paid in arrears and so the employer needs to pay this part upfront and claim it back; and

  • Her employer will also pay her an additional £70 (i.e. 1/3 of the hours not worked).

• In this example, Beth is only working 2 days a week (and not her normal 5 days a week), but she will receive pay for 4 days a week in total. Her employer has to pay her for 3 of those days (for 2 days’ work), whilst the Government will fund a further day’s pay.

The JSS is expected to cost the Government £500m (as opposed to the £40billion cost of the CJRS).

It is well-intended but, as explained above, is limited in its application. However, the JSS will hopefully slow down the rise of unemployment but maybe only until the New Year and only in those firms where there is still work to do. For firms where there is no work to do, we expect we will continue to see further redundancies in the run up to Christmas.