Job Support Scheme: What we know so far
Employers need to know whether the Job Support Scheme (JSS) will help them to retain some employees, but there are unanswered questions. Rebecca Cave summarises what we know and where the knowledge gaps are.
Replies (16)
Please login or register to join the discussion.
I can't see there being a big uptake on the JSS, several problems
1. the cost to the employer for not a lot of work is too high
2. its cheaper to employ 1 person full time than 2 for a third of the time
3. the requirement to actually do work to be eligible will either exclude the availability for a lot of workers, or force the employer to incur extra cost to bring someone in who they dont actually need, not to mention the fact that this could bring more people into circulation and spread the virus
4. the cost of redundancy will be less in many cases
5. whilst employers may want to keep staff who they have invested in, the job market will be bouyant and picking up new staff may be easier than pre covid
the level of government support seems very stingy at at max of £697 per month, but many would argue that the furlough scheme was too generous
''The factsheet makes it clear that this is the pre-Covid wage rate...''
Not to me! It says
“Usual wages” calculations will follow a similar methodology as for the Coronavirus Job Retention Scheme. Full details will be set out in guidance shortly.
Surely your example is Employer 12hrs + 8hrs (1/3 of hours not worked) = 20hrs (not 28hrs), JSS 8hrs, Employee forgoes 8hrs? Unless I "mis-read" ;)
Not quite. The employer will pay the 12 hours worked but also, initially, will have to pay 2/3 of the hours not worked. The 1/3 covered by the JSS is paid by the government to the employer later on.
That's as I understood it too, having studied Rebecca Cave's example under the heading "Who pays what", and also read the fourth bullet point of paragraph 3 of the factsheet ("What does the grant cover").
At the third bullet point of paragraph 1 of the same factsheet, however, it does state that the government and the employer will each pay a third of the unworked hours "ensuring employees earn (?) 77% of normal wages WHERE THE GOVERNMENT CONTRIBUTION HAS NOT BEEN CAPPED". The implication here is that the employee will NOT receive 77% if the cap applies - if the employer makes up the shortfall (in the government's contribution) the employee would receive 77% regardless.
I have no desire to contradict any contributor, but would like some clarification.
I believe the article has since been updated to reflect the uncertainty around this issue
yes it seems so.
‘The JSS grant only covers the pay for 33% of the hours not worked. The employer must pay for 33% of the non-working hours, and the employee must forego pay on the balance of the non-working hours.’
If employer pays for 28 hours and jss covers 8 hours, the employee will receive full 100% of normal pay with employer covering 66% of non working hours which i think is wrong.
This means employers will pay 78% of normal wage for 33 time worked??
as above, the employer will pay 20 hours in total
Edit - ok, i understand now. The employer pays 2/3 of non working hours then claim 1/3 back off the goverment.
"The scheme can be used alongside the Job Retention Bonus"
I wonder how the figures will work out for low salary sole directors doing a bit of admin and being paid the minimum of £520 per month in order to get the £1000 bonus?
Thank you for the article.
I work with a small business in hospitality with a number of employees on zero hours contracts. Government restrictions have made it difficult to operate profitably. I consider the JSS unhelpful for businesses in a similar position.
They will obviously try to match the cost of food and wages to minimal income. The last thing they need is to be paying staff for more than the hours they work and make a loss plus the added work of JSS calculation and submission. Of course I understand that it helps the employee by paying a ‘usual’ wage, but not the employer.
My conclusion has to be that it is not worth using the JSS and there will be more redundancies. More so that it does not help those on zero hours contracts or small businesses with tight budgets during these difficult times.
Hi Rebecca.
Thanks for this which is very helpful. I am however, wondering if the example is correct where it states "...the employer must bear the cost of the balance: £2,413.44 plus ..."? Isn't the (net) employer contribution to hours not worked limited to the one third or normal pay ... making individual employee calculations more complicated?
The Factsheet states that:
"The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, WHERE THE GOVERNMENT CONTRIBUTION HAS NOT BEEN CAPPED."
The 77% minimum applies where 33% of normal hours are worked and a full Government contribution is received by the employer. The wording in the Factsheet implies that if the Government contribution is capped, the employee may receive less than 77%.
The Factsheet goes on to say:
"For time not worked, the employee will be paid UP TO two-thirds of their usual wage."
(CAPS added by me in each case, for emphasis)
It also states that:
" Our expectation is that employers cannot top up their employees’ wages above the two-thirds contribution to hours not worked at their own expense."
I am not sure where this leaves us as regards (a) the expected JSC rules (b) the content of the required written agreements between employer and employee for the JSC, and (c) interaction between the JSC and employment / contract law.
Any thoughts?
Hi Rebecca, as usual before Rishi had sat down I was getting emails from clients asking what the changes to JSS meant and what they would get! I expect you have been trawling through anything HMRC have published and look forward to your next article. What I have spotted though is that for JSS, hours paid as worked (eg the 20% minimum) must be paid at minimum wage. I do have sole director businesses with no work eg serving the events industry, working from home so no other grants so though not much, any little claim I can make for them has helped keep the wolf from the door. But of course, they are only paid at around the NIC threshold so if it were to cover a 35 hour week would be well below minimum wage. What are your thoughts on the Director/minimum wage issue?
Following..... I beleive there would also be a potentional issue with regards to an employment contract as very few owner manager directors have a contract.
That's an important point. There will no doubt be a lot of OMB directors on NIC threshold salaries with no main work doing "admin, training and marketing" for one day a week.