The Government’s Coronavirus Job Retention Scheme (CJRS), commonly known as Furlough leave ends on 31 October 2020. This is to be replaced by the Government Job Support Scheme, which is due to come into force on 1 November 2020.

On Thursday afternoon (22 October 2020), the Chancellor confirmed that there would be amendments to the Job Support Scheme (JSS) originally announced on 24 September 2020.

There are two schemes to consider. These are:

1. JSS Open – where Employers are still able to open; and
2. JSS Closed – where the Employer has been legally required to close by one of the four UK Governments.

JSS Open
The main points of the revised ‘JSS Open’ are:

• An employee will need to work at least 20% (no longer 33%) of their normal hours.
• The employee will receive normal pay for the hours they work, and two-thirds of pay for the hours they do not work.
• For the two-thirds top-up, the government will pay 61.67% (up to a cap of £1,541.75 per month), and the employer will pay 5% (up to a cap of £125 per month), plus NI and pension contributions on the full amount.
• There must be a written agreement between employer and employee, agreeing to the changes.
• Employees must be on an employer’s PAYE payroll between 6 April 2019 to 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
• Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period. It is unclear whether this covers employees serving notice for reasons other than redundancy.
• The first claims can be made from 8 December 2020 (i.e. 5 weeks after the scheme opens on 1 November) via an online portal, similar to the Coronavirus Job Retention Scheme.
• The Guidance confirms that employers can top up wages beyond the amounts provided for in the JSS.
• Fully funded public sector employers cannot claim, but public sector employers who receive funding at least in part from private sources can claim, if their private funding has been disrupted.
• The JSS will run for six months from 1 November 2020 and the increased support for employers will be reviewed in the new year.

Guidance concerning how to calculate the claims will be released at the end of October. However, the Government has confirmed the reference periods for employees as below.

Reference Salary for Employees with Fixed Pay
For employees who are paid a fixed salary, the Reference Salary is the greater of:

• the wages payable to the employee in the last pay period ending on or before 23 September 2020;
• the wages payable to the employee in the last pay period ending on or before 19 March 2020, this may be the same salary calculated under the CJRS scheme.

Reference Salary for Employees with Variable Pay
For employees whose pay is variable the Reference Salary is the greater of:

• the wages earned in the same calendar period in the tax year 2019 to 2020;
• the average wages payable in the tax year 2019 to 2020;
• the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020.

JSS Closed
This scheme is only available to those employers who have been legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK.

For these businesses, the JSS Closed, will help them through the period that they are directly affected by these restrictions by supporting the wage costs of employees who have been instructed to cease work in eligible (closed) premises. Under this:

• Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month;
• Their employer has discretion to pay more than this if they wish;
• Employees must be on an employer’s PAYE payroll between 6 April 2019 to 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
• Again, employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.

Please note that employers cannot claim both JSS Open and JSS Closed in respect of a single employee for the same day.

Fraudulent Claims
Due the number of fraudulent claims submitted under the furlough leave scheme, HMRC have explicitly confirmed that they will check claims and payments may be withheld if HMRC suspects a claim to be ineligible.

Current Guidance is limited, however a Treasury Direction is expected to be issued soon on both schemes. We will send out further information and the template agreement letter once more guidance has been published.

If you would like to discuss further, please contact us by emailing enquiries@perspectivehr.co.uk or by phoning 01392 247436.

Last updated 26 October 2020