UK: New, Expanded Job Support Scheme Replaces Furlough Scheme

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On 24 September 2020, and as discussed here, the UK Government announced a new wage support scheme for employers to replace the furlough scheme from 1 November 2020 (running until 31 April 2021). The Job Support Scheme (JSS) will allow employers to agree to move employees to reduced hours, with both the employer and HMRC providing a partial subsidy of pay for hours not worked. Since the original announcement, the JSS has been expanded to include support for employees who work for UK firms which are required to close premises by law due to national or regional COVID-19 restrictions this winter. The two limbs of the JSS are now referred to by the government as JSS Open and JSS Closed.

Last week the government announced yet more changes to the JSS. The changes significantly alter the JSS Open, as announced on 24 September, in two ways:

1. Employees can work fewer hours: Employees will need to work only 20% (previously this was 33%) of their usual working hours to be eligible for support under the JSS.

2. Employer contributions reduced: Employers will be required to pay only 5% of salary costs for usual hours not worked, reduced from 33% under the original terms of the JSS. The government will contribute 61.67% of reference salary (by way of a reimbursement of the employer), up to a maximum of £1,541.75 a month. The JSS does not cover National Insurance Contributions or pension contributions, so employers will also be liable to make these payments. 

For further details about the status of the JSS, click here.

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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