• Eamonn Watson

PAYROLL HELP AS FURLOUGH ENDS

Updated: Oct 30

As November begins and the Job Retention Scheme, “furlough,” that has sustained millions of jobs in March now ends, employers and employees need to agree a new way of working and support.


We appreciate that the two replacement JSS schemes are a lot to get your heads around and a stressful time, so if you have any payroll questions please contact Joan (below), Kate or Karen in our payroll team and they will guide you through it.

(Joan heads the T+G payroll team and with Kate and Karen can help you with the changes.)


For the next six months from November 1st, 2020 the Job Support Scheme will replace the JRS and provides different types of support to these businesses so they can get the right assistance, at the right time, according to their situation.


Businesses that are open but facing decreased demand can get support for wages through JSS Open. Those businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK can get the support, they need through JSS Closed.



Here’s a summary of how the two versions of the Job Support Scheme work to support jobs through the winter, protecting staff from redundancy.


JOB SUPPORT SCHEME

  • There is a full detailed overview policy paper published by the HMRC.

  • The JSS begins on 1st November 2020 and runs for 6 months, to 30th April 2021.

  • There will now be 2 schemes

  • JSS Open for businesses that are remaining open

  • JSS Closed for businesses that have been required to close under lockdown regulations:

  • Employees can come on and off the scheme, but each period on the scheme must be for a minimum of 7 days

  • You will be reimbursed in arrears for the government contribution and claims can be made from 8th December 2020.

  • The employee must not be made redundant or put on notice of redundancy during the period the employer is claiming the grant for that employee. It is not yet clear if it can be used to cover notice periods for non-redundancy leavers.

  • Previous use of the Furlough scheme is not a pre-requisite of using this scheme.

  • The employee must be on payroll on or before the 23rd September 2020.

  • You can use this scheme alongside the £1000 Job Retention Bonus, if you meet eligibility requirements.

  • You’ll be able to claim the bonus between 15 February 2021 and 31 March 2021. You do not have to pay this money to your employee.



(Kate will assist you in working out what is the best way forward under JSS.)


JSS OPEN


For Employers facing decreased demand

The Job Support Scheme Open begins on November 1st for those businesses that are open, but are experiencing a drop in demand, or if the business has been closed by law.

Many employers can operate safely but continue to face reduced demand so they may need extra support over the winter to help keep their employees attached to their workforce.

For these employers, the Job Support Scheme, through JSS Open, will give employers the option of keeping their employees in a job on shorter hours rather than making them redundant.

· Employees will need to work at least 20% of their normal hours and will be paid normal pay for those hours by you.

· They will receive two-thirds of pay for the hours they do not work.

· For this two-thirds top-up, the government will pay 61.67% and you will pay 5%), plus NI and pension contributions on the full amount.

· This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

· You can opt to top up to full pay if you wish to.

· There must be a written agreement between employer and employee, agreeing to the changes.

JSS CLOSED


For Employers who are legally closed by one or more of the four governments of the UK.


For these businesses JSS Closed will help them through the period that they are directly affected by these restrictions by supporting the wage costs of employees who have been instructed to cease work in eligible (closed) premises.

· The employees will receive two-thirds of their normal wages, funded by the government up to a cap of £2,083.33 per month.

· You will have to pay the NI and pension contributions on that amount.

· You can opt to top up to full pay if you wish to.

· There must be a written agreement between employer and employee, agreeing to the changes.

· Employees may also be entitled to additional financial support, including Universal Credit.


(Karen can help you with your questions as you move over to the new JSS.)

Example Calculations : -

To calculate the amount of pay: for employees who are paid a fixed salary, the 'Reference Salary' 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, this may be the same salary calculated under the CJRS scheme


For those who receive variable pay, the 'Reference Salary' 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; or,

· the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020


There are complex rules to work out 'normal hours' in sections 5.2 and 5.3 of the policy papers. The payroll team will be able to assist you with any figures and calculations.


THE JOB SUPPORT SCHEME


A new Job Support Scheme to replace the Job Retention Scheme will be introduced from November 1st to protect viable jobs in businesses, who are facing lower demand over the winter months due to coronavirus.


Overview of the scheme


Check if you can claim the Job Support Scheme

Check if you can claim the Job Support Scheme Open if your business is still operating

Extra steps to take before calculating your claim through the Job Support Scheme Open

Check if you can claim the Job Support Scheme Closed if your business is closed

Check how different employment conditions affect eligibility for the Job Support Scheme

Find examples to help you calculate your employee's wages for the Job Support Scheme

Complete a Financial Impact Test if you’re a large employer claiming through the JSS Open

Claim the Job Support Scheme

Calculate how much you can claim through the Job Support Scheme

Steps to take before calculating your claim through the Job Support Scheme

Complete a Financial Impact Test if you’re a large employer claiming through the JSS Open

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