Essential Trustee – What charities need to know about the Job Support Scheme

Please note, since this article was first published the Government has announced a further extension to the Coronavirus Job Retention Scheme to 31 March 2021, meaning that the Job Support Scheme will no longer take effect from 1 November as originally proposed. Please see our latest article.

It goes without saying that the impact of the COVID-19 pandemic on the UK charity sector has been severe, with soaring demand for services as communities self-isolate and vulnerable people need additional support while simultaneously services are frequently being suspended in order to comply with government restrictions, and fundraising efforts scaled back.

The Government’s proposed successor to the Coronavirus Job Retention Scheme (CJRS) was first announced on 24 September 2020 (see our ‘stop press’ article). The Job Support Scheme (JSS) will take effect from 1 November 2020 and is designed to provide assistance to employers with the cost of paying staff. It will provide two levels of support: first, to employers facing lower demand for services over the winter months due to the pandemic (‘JSS Open’) (see the Government’s JSS factsheet), and second, to those employers who are legally required to close their premises due to local or national restrictions (‘JSS Closed’)(see the Government’s Factsheet for Closed Business Premises). There are different eligibility criteria and entitlements under these two different strands of the JSS, which are set out in the factsheets.

As a result of the latest announcement by the Chancellor on 22 October 2020, the Government will be increasing its contribution to wage costs under the JSS Open. Under the revised JSS Open scheme, employees will receive up to two thirds of their usual salary for hours not worked.

The JSS departs from the CJRS in that it is designed to support ‘viable jobs’ in organisations facing lower than usual demand over the winter months due to COVID-19. Unlike under the CJRS, employees cannot be made redundant or be put on notice of redundancy during the period in which the employer is claiming the grant for the employee. Charities considering making use of the JSS should therefore ensure that they are comfortable that staff roles have ongoing viability. If charities cannot satisfy themselves that particular roles will continue to be required, it would be sensible to consider restructuring or agreeing reduced hours arrangements (without accessing the JSS).

The guidance that has been provided so far gives basic information on how the new JSS will work and who can use it. At present, the charity sector should note that the JSS will operate as follows:

JSS open

• Large employers are expected to have to meet a financial assessment test to show the negative impact of COVID-19 on their turnover. Small and medium enterprises will not be required to meet this test.
• Employees must be on an employer’s PAYE payroll on or before 23 September 2020 to be eligible under the Scheme.
• The minimum number of hours worked by an employee to be eligible under the scheme will be just 20% of their normal hours, rather than 33% as originally announced.
• The employer contribution to pay for hours not worked by the employee will be just 5%, capped at £125 per month, rather than a third of the unworked hours as originally announced. Employers can top up wages above the 5% contribution at their discretion.
• The Government will pay up to 61.67% of wages for hours not worked, to a maximum of £1,541.75 per month (rather than £697.92 as originally announced), meaning that employees will take home at least 73% of their normal pay for working 20% of their usual hours. As with the CJRS, employees can be rotated on and off the scheme, but each short time working arrangement must cover a minimum period of seven consecutive days. Employers must agree the temporary working arrangement in writing with the employee.
• Claims will be paid to employers on a monthly basis, in arrears, with the first claims being paid in December 2020.

JSS closed

• The Government will pay two thirds of each employee’s normal pay, up to a maximum of £2,100 per month, in respect of employees who are unable to work due to ongoing coronavirus restrictions.
• The JSS will be available to UK employers of any size, although it is also anticipated that large employers will be required to meet a financial assessment test in order to be eligible to claim under the scheme. 
• Employers will not be required to contribute towards the wage cost (although can elect to do so), but will be required to pay employer NICs and pension contributions on the amount claimed.
• Claims will have to be made online in arrears, through a HMRC portal that will be available from early December.
• Cash grants of up to £3,000 per month (payable every two weeks) will be available to businesses required to close, linked to rateable values.

In both scenarios the scheme is open to employers that have not previously used the CJRS, and in both cases employers must agree the arrangements with the individual employee and confirm the agreement in writing. If you require support moving employees onto the JSS and confirming the employee’s remuneration and rights in writing please contact Sonya O’Reilly or another member of the Employment Law Team.

This article is from the October 2020 issue of Essential Trustee, our newsletter for charity trustees and senior management. To download the latest issue, please visit the newsletter section of our website. Law covered as at October 2020.