The Job Support Scheme (JSS) is designed to help employers retain valuable employees by subsidising their salaries by up to 22%, but only if the employee works at least one third of their usual hours. However, the JSS may have a low take-up due to the heavy cost burden on the employer.
The employer must pay the employee in full (at their usual pre-covid rates) for all the hours actually worked, but the employee will also receive pay for two thirds of the time that do not work. The employee won’t have to work every week or month, as they will be able move in and out of the JSS scheme, as long as each working period is at least seven days.
Example
Jo is an airline pilot on an annual salary of £72,000, or £6,000 per month. In a normal month she would work 225 hours, which is £26.67 per hour.
Jo has agreed to work a third of her usual working time: 75 hours per month for £2,000. Under the JSS her employer also pays Jo for two thirds of her remaining normal hours: 100 hours for £2,667. Jo receives £4667, which is 77.78% of her normal pay for working one third of her normal hours.
The JSS should cover one third of the time Jo doesn’t work:50 hours at £26.67 = £1,333.50. But the JSS grant is capped at £697.92 per month, per employee.
The employer must pay: £3,969.08 (£4667-697.92) plus employer’s NIC on the full amount of pay: £4,667 and any relevant workplace pension contributions on that sum.
Any employee on the payroll as at 23 September 2020 (as reported under RTI) can qualify for the JSS, there is no requirement for them to have been previously furloughed. However, employees who are already on notice for redundancy, or who have been made redundant can’t be included on a JSS claim.
Any small or medium sized employer with a UK bank account will be able to use the JSS without further conditions applying. There will be a financial assessment for larger employers to meet, which will probably those with 250 or more employees.
The employer must pay the employee first, and then make a claim for the JSS through an online portal which will open in December 2020. The employer will be paid the JSS grant once each month, but only after the RTI return that reports the employee’s wages has been received by HMRC.