UK Chancellor Announces Expansion of Job Support Scheme

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

On 9 October 2020, the UK government announced an extension to the Job Support Scheme (JSS) for businesses that are legally required to close on account of coronavirus restrictions. This measure will sit alongside the original JSS and the Job Retention Bonus, replacing the Coronavirus Job Retention Scheme (CJRS), which will end on 31 October 2020.

Under the expanded JSS, employers “whose premises are legally required to shut for some period … as part of local or national lockdown restrictions” will be eligible to receive grants for the purposes of paying the wages of staff who cannot work.

The government will support eligible businesses by paying two-thirds of each employee’s salary (or 67 percent) up to a maximum of £2,100 a month. Employers will not be required to contribute towards wages but will need to cover National Insurance contributions (NICs) and pension contributions.

In order to be eligible, the employees must have been off work for a minimum of seven consecutive days and the employer must have a UK Pay As You Earn (PAYE) payroll registered on or before 23 September 2020.  This means that a Real Time Information (RTI) submission notifying payment to that employee to Her Majesty’s Revenue and Customs (HMRC) must have been made on or before this date.

Additionally, Chancellor of the Exchequer Rishi Sunak MP announced that cash grants for businesses required to close had increased to up to £3,000 per month (rather than up to £1,500 per three weeks), and were eligible for payment after only two weeks of closure (rather than three).

Businesses will be entitled to claim the grants only while they are subject to coronavirus restrictions.

This expanded version of the JSS is available to employers in all sectors (and not limited to the hospitality sector, for example). In order to participate in the scheme, ‘large’ employers will have to pass a financial impact test to demonstrate a lower turnover as a result of the pandemic. The government will release the criteria for the financial impact test in due course.

The scheme will begin on 1 November 2020 and will be available for six months, with a review point in January 2021. The government has not yet published full guidance related to the scheme.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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