Guidance to law firms on the Job Support Scheme

The Job Support Scheme (JSS) is the new government package to subsidise the wages of employees in organisations struggling due to coronavirus (COVID-19) suppression measures.

The JSS will replace the Coronavirus Job Retention Scheme (CJRS) as soon as England comes out of national lockdown. Until that time, the CJRS will be in operation.

There are two parts to the scheme:

  • JSS Open
  • JSS Closed

Job Support Scheme Open

The JSS Open is designed to protect jobs in organisations that can operate safely but are facing lower demand over the winter months due to COVID-19. The JSS Open enables organisations to retain employees on shorter hours.

Employees must work a minimum of 20% of their normal hours. The government will pay 61.67% of hours not worked up to a cap of £1,541.75 per month, with the employer paying 5% of non-worked hours up to a cap of £125 per month.

These caps are based on a monthly salary of £3,125. Employees should earn a minimum of at least 73% of their normal wages, where their usual wages do not exceed the cap.

HM Revenue and Customs (HMRC) will publish the names of employers who have used the scheme.

Employees will be able to check if their employer has made a claim relating to them via their Personal Tax Account. This is being done to make it easier for the public to report suspected fraudulent use of the scheme.

Job Support Scheme Closed

The JSS Closed is designed to compensate employers that have been legally required to close their premises as a direct result of coronavirus restrictions.

These businesses vary depending on local needs, but tend to be:

  • pubs
  • gyms
  • entertainment centres
  • non-essential retail

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, although their employer has discretion to top up the government contribution if they wish.

This guidance will focus on the JSS Open as so far office-based work has not been included in JSS Closed.

Different rules and regulations in Wales

The devolved administrations have responsibility for public health in their countries. This means that Wales, Scotland and Northern Ireland may choose to have different levels of restrictions from England and offer different support.

If your organisation has offices in Wales it’s worth looking at the Welsh government’s advice website.

Like the CJRS, all employers with a UK bank account and UK PAYE schemes can claim the grant.

Neither the employer nor the employee needs to have previously used the CJRS, so if your organisation has not previously accessed government support, you can still use the JSS Open.

Organisations with 250 or more employees will have to meet a financial impact test. They will only be able to access the scheme if their turnover has stayed level or is lower now than before experiencing difficulties from COVID-19.

The government has published more details as to how the financial impact test will work in its Job Support Scheme policy paper.

There will be no financial impact test for small and medium enterprises (SMEs) and charities.

The full details of how to do this have yet to be published. What we do know is that:

  • employers will be able to make a claim online through GOV.UK from 8 December 2020
  • grants will be paid on a monthly basis
  • grants will be payable in arrears meaning that a claim can only be submitted in respect of a given pay period, after payment to the employee has been made and that payment has been reported to HMRC via a real time information (RTI) return

Employees must be on an employer’s PAYE payroll at some point between 6 April 2019 to the end of 23 September 2020.

This means a RTI submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.

Staff on any type of contract are eligible, including those on variable or zero hours and agency workers.

Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short time working arrangement must cover a minimum period of seven consecutive days.

The employee must work at least 20% of their usual hours and they can undertake training in their working hours whilst being claimed for.

Employers will pay the full salary for all hours worked, plus 5% of non-worked hours – capped at £125 per month – plus the full NICs and automatic enrolment pension contributions. Employers can top up employees’ non-worked wages above the 5% contribution if they wish.

The government will contribute 61.67% of the salary non-worked hours, capped at £1,541.75 per month.

The government calculates that, when combined with the minimum hours requirement, employees covered by JSS Open will receive at least 73% of their wages, up to the cap of £3,125 per month.

Employment and equality law apply. Law firms and organisations should create an objective selection procedure to decide who to place on JSS Open. This will ensure the employer is fair and consistent, limiting the risk of falling foul of discrimination law.

Direct discrimination occurs when a person is treated worse than another person because of a protected characteristic. For example, if the employer chooses a female employee because the organisation assumes she would appreciate not working as many hours as a male employee because she is a parent.

Indirect discrimination occurs when a policy applies in the same way for everybody but disadvantages a group of people who share a protected characteristic. For example, if the employer selects people on a ‘last-in, first-out’ criteria they risk discriminating against workers based on age, because the criterion is likely to unfairly target young people.

Decisions should be justified. For example, your organisation may be able to justify giving preference to those in vulnerable groups to be off work because it cannot meet its duty of care towards them if their job requires them to break social distancing guidelines.

In some cases, the job role will determine who is selected. If your business wants to place only a percentage of those who perform certain roles on JSS Open, it should consider asking for volunteers first – while making no guarantees that they’ll be selected. This could involve discussing preferred working patterns.

Yes. These are significant changes to an employee’s working practices, so there’s a legal requirement for the change in the employment contract to be agreed.

The government asks that organisations that use the JSS Open make any changes to the employment contract by agreement and notify the employee in writing.

This agreement must be made available to HMRC on request.

Yes. If this happens, you can explain to the worker that the alternative could be redundancy, if that is the case.

The worker will still have their statutory rights protecting against unfair dismissal, so if they refuse to accept the changes, and the organisation can no longer afford its wage bill, it would still need to follow a fair redundancy process.

Yes, but not while their wages are covered by JSS Open.

The government has stated that employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

If an organisation starts a redundancy process, all affected employees whose wages are subsidised by JSS Open should revert back to their original terms and conditions.

No. What matters is that an employee receives their full salary for at least 20% of their contracted hours.

For example, this could include training or doing tasks that they have not done before.

No. Employees can work different amounts of hours each week, as long as they work at least 20% of their normal hours.

The government’s Job Support Scheme policy paper contains information about how to calculate claims, and also how to calculate what 20% of normal working hours is for those on zero-hours contracts.

If your business is planning on varying the hours those on JSS Open work each week, it’s good practice for there to be a clear understanding as to how and when hours are set.

Those with caring responsibilities may need space to make appropriate arrangements if their actual working hours increase.

The government has said that it expects that large employers will not make capital distributions while using the scheme. This is not a formal policy, though the JSS Open is meant for organisations that are struggling financially.

It’s possible that HMRC could ask questions of any large organisations that has both used JSS Open and paid dividends around how necessary it was for them to claim the grant.

Credit: Lewis Silkin