The Government has introduced the JSS to help employers retain their employees.

Overall, the JSS will work in a similar way to furlough, that being, an employees wage will be paid between their employer and the Government.

JSS Opens on 1 November 2020 and will run until 30 April 2021.

In January 2021, the Government will review the JSS and may make changes to it.

Applications will open on 8 December 2020. You will be able to make claim backdated to 1 November, which is the date the JSS officially opens.

Furlough was introduced back in March 2020, when the entire UK went into a lockdown. Furlough was a blanket scheme applicable to any business whereby furloughed employees’ were made temporarily redundant. This meant their wages were cut by 20 per cent. Within the remaining 80 per cent of wages that were still to be paid, a 60 per cent contribution was made by the Government and the last 20 per cent by the employer. The furlough scheme ended on 30 November 2020

The JSS is seen as an improvement on furlough and has been introduced as a response to various regional lockdowns. Different parts of the UK are now facing different levels of restrictions, based on the prevalence of Covid-19 in the region.

As a result, some businesses are facing a reduced demand, whilst others are legally required to close. The JSS schematics work differently depending on your business. The former is eligible for JSS Open, whilst the latter can apply for JSS Closed.

Employees who work on reduced hours due to Covid-19 will continue to be eligible to Working Tax Credits and childcare elements throughout the JSS.

No specific guidance or legislation exists in this matter. The Government are working to introduce legislation soon.

Any business that is open but facing a reduced demand can apply for the JSS Open scheme and access Government funds to help them pay their employees.

The calculation of usual/normal hours differs based on whether the employee works fixed or variable hours.

If the employee works fixed hours, their usual/normal hours is calculated by:

The greater of the number of hours contracted for at the end of the last pay period before 23 September 2020 and the number of hours contracted for at the end of the last pay period before 19 March 2020.

Divide by the number of calendar days in the repeating working pattern, including non-working days.

Multiply by the number of days which the employee is eligible to be claimed for under JSS Open.

If the employee works variable hours, their usual/normal hours is calculated by:

The number of hours worked in the same calendar period in the tax year 2019 to 2020.

The average number of hours worked in the tax year 2019 to 2020.

The average number of hours worked from 1 February 2020 (or the employee’s start date if later) until 23 September 2020.

Employees on temporary contracts are eligible provided:

That there is a written agreement between the employer and the employee or the trade union(s) that represent the employees.

The temporary agreement must be for at least seven consecutive days.

That any agreement complies with existing employment, equality and discrimination laws.

A record of the agreement is kept for five years.

A record of the hours the employee(s) work and the amount of usual hours that they are not working.

That the agreement can be presented to HMRC whenever they request it.

To be eligible for JSS open, you must pass a financial impact test.

This is a self-test, so you need to do it yourself.

If you are an employer with over 250 employees as of 23 September 2020, you will need to conduct a financial impact test. The outcome of this test will determine whether you are eligible for JSS Open.

If you are a UK registered charity with over 250 employees as of 23 September 2020, you do not need to do a financial impact test and you are eligible for JSS Open.

If you submit your VAT returns monthly, compare the three consecutive months which are due to be filed and paid by 7 November 2020, with the same period in 2019.

If you don’t submit your VAT returns monthly, you need to do the same thing but you’d be required to submit an additional VAT return between 31 August 2020 and 7 November 2020 in order to be eligible for JSS Open.

If you belong to a VAT group, please use the turnover figures for the group to conduct the financial impact test.

If your turnover between 31 August 2020 and 7 November 2020 is equal or lower than your turnover between 31 August 2019 and 7 November 2019, you are eligible for JSS Open .

If your turnover between 31 August 2020 and 7 November 2020 is higher than your turnover between 31 August 2019 and 7 November 2019, you are not eligible for JSS Open because an increased turnover shows that your business has not been negatively impacted by coronavirus.

Once the JSS Open eligibility criteria is met:

The employer will pay the employee full pay for 20 per cent of their usual hours that they’re required to work.

The employee will then receive 66.67 per cent of their normal pay for the usual hours not worked.

5 per cent of this is contributed by the employer

The Government will contribute towards the remaining 61.67 per cent

There are caps associated with JSS Open:

The 5 per cent that the employer must contribute to is capped at a maximum of £125 per month. Although, they are free to contribute more, should they wish to.

The 61.67 per cent that the Government must contribute to is capped at a maximum of £1,541.75 per month.

If the employee is called in to do voluntary training in their non-working hours, the employer will need to pay any additional wage where time spent on training attracts a minimum wage above the JSS grant payment.

No JSS Open claim can be made on the 20 hours the employee continues to work.

Any business that is legally required to close due to Covid-19 and lockdown restrictions can apply to the JSS Closed scheme and access Government funds to help them pay their employees.

To be eligible for JSS Closed, businesses must comply with the general JSS eligibility criteria. Specific to JSS Closed, they must:

Have at least one premises that has been forced to legally close due to the impact of Coronavirus directly through the orders of at least one of the four governments of the UK.

A legally closed business is one that:

Has at least one premises closed due to coronavirus restrictions introduced by the UK Government.

Is restricted to only a delivery and collection service.

Is restricted to only provide food and drink outdoors.

The exclusion criteria is as follows:

Your business premises has been closed by your local authority due to an outbreak in your workplace and not because of Government restrictions.

Businesses can only claim for JSS Closed for the period they are legally required to close due to Government restrictions. As soon as your business is allowed to open again, you will no longer be eligible for JSS Closed, but you could be eligible for JSS Open.

You can claim for your employees that:

Would normally work at the premises that is now legally required to close due to Government restrictions.

Would normally work at the premises that is now legally required to close due to Government restrictions.

Have stopped working for a minimum of seven consecutive calendar days.

JSS Closed is much more of a simple process. The Government will pay 67 per cent of every employee that is put through the scheme at a maximum cap of £2,083.33 per month, per employee

The employer is free to contribute but is not legally required to.

If the employee is called in to do voluntary training in their non-working hours, the employer will need to pay any additional wage where time spent on training attracts a minimum wage above the JSS grant payment.

Employees on temporary contracts are eligible provided:

That there is a written agreement between the employer and the employee or the trade union(s) that represent the employees.

The temporary agreement must be for at least seven consecutive days.

That any agreement complies with existing employment, equality and discrimination laws.

A record of the agreement is kept for five years.

A record of the hours the employee(s) work and the amount of usual hours that they are not working.

That the agreement can be presented to HMRC whenever they request it.

To make sure your business is eligible to claim you cannot be making any form of capital distribution.

JSS does not cover:

Employees that have been made redundant.

Employees serving a contractual or statutory notice. For example, employees who have handed in their resignation and are serving their notice period.

JSS does not cover:

Employees that have been made redundant.

Employees serving a contractual or statutory notice. For example, employees who have handed in their resignation and are serving their notice period.

An employee is required to:

Continue any pre-agreed pension contributions, unless they consent to stop.

Continue student loan contributions, if applicable.

Continue apprenticeship levy contributions, if applicable.

You can only claim the wages that you have already paid to the employee

You can only claim after the employee starts working the reduced hours (applicable to JSS Open only)

You cannot cannot enter into any agreement with the employee that would reduce their wages to a threshold below the amount you claim i.e. a salary sacrifice scheme. This includes all costs in connection with the employment.Therefore you can claim on the reference salary.

If your employee has allowed you to make deductions from their net salary, these deductions can continue while the employee is working reduced hours provided that these deductions are not administration charges, fees or other costs in connection with the employment.

Any fund that are incorrectly awarded or paid due to incorrect information provided must be reimbursed. You will be notified of any steps to follow during the claiming application and process, which opens on 8 December 2020.

Businesses who make fraudulent claims will be publicly named and shamed and will be required to pay back all monies wrongfully awarded.

No, your application for the previously expired furlough or future application for the Job Retention Bonus, which in 2021, remains unaffected by your JSS applications.

Reference salary is made up of the following elements

The regular wage

Non-discretionary payments (e.g. overtime)

Non-discretionary fees

Non-discretionary commission payments

Pierce rate payments e.g. if employees are paid per item they produce

Reference salary does not include:

Trocs e.g. tips and service charges

Discretionary bonuses

Non-cash payments

Discretionary commission payments

Non-monetary payments

Non-monetary benefits e.g. company care, salary sacrifice, pension contributions and, essentially. anything that would reduce an employee’ taxable pay.

Reference salary for fixed pay employees 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.

Reference salary for variable pay employees 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.