On 22 October 2020, HM Revenue & Customs released further details on
UK Job Support Scheme (JSS),
first announced in September. The JSS will now be scaled up and expanded to further support businesses
adversely affected by COVID-19 and the associated lockdown restrictions.
expanded JSS covers businesses which can now be categorised into two groups: (a) those
forced to closed due to elevated restrictions pursuant to the UK’s tier
system; and (b) those not required to close but forced to operate on a
reduced basis because of COVID-19, either directly through lower-level
restrictions or indirectly, because of decreased demand.
The twin JSS schemes will cover the period from 1 November 2020 to 30 April
2021, with a review date in January 2021. Employers will be able to make
the first claims from 8 December 2020.
JSS Closed is, in effect, the new iteration of the UK government’s
Coronavirus Job Retention Scheme (CJRS), set to close 31 October 2020, and
offers grants to businesses under (a) above. For employees who cannot work
at all directly due to COVID-19 restrictions set by one of the UK devolved
nations — for example, pubs and bars (which do not operate as restaurants)
in Tier 3 areas in England — will be able to have two-thirds (67 percent)
of their normal pay covered under JSS Closed, subject to a cap of £2,083.83
The grant is less generous than that offered pursuant to CJRS, which
provided for 80 percent of pay to be supported; i.e., employees forfeit an
additional 13 percent of their normal pay than they would under CJRS.
Employers may exercise their discretion to contribute toward employee pay
and employees may be eligible for additional government support, such as
Universal Credit, to top up their pay.
Businesses under category (b) above can claim for grants as before under
the original JSS announced in September, as revised and now referred to as JSS Open. Under JSS Open, those businesses which are able
to sustain viable jobs on short-time working of at least 20 percent of
employees’ normal working hours — equivalent to just one day a week on a
full-time basis — can claim for up to two-thirds (66.67 percent) of hours
not worked, subject to a cap of £1,541.75 per month. Under the original JSS
announced in September, employees had to work at least 30 percent of their
normal working hours.
An employer will now also have to make a contribution of 5 percent of pay
for hours not worked, subject to a cap of £125 per month (previously, this
was a third of the hours not worked). The employer must also pay employer’s
National Insurance contributions and any minimum pension contributions.
Employers will have discretion to pay more than the minimum contribution.
Accordingly, under JSS Open, employees will receive 73.33 percent of their
normal pay, where the employee earns £3,125 a month or less, and will
forfeit the balance of 26.67 percent.
Conditions underwriting JSS Open and JSS Closed
Employers must seek the express, written agreement of employees to record
the short-time working arrangements under the JSS Open and JSS Closed
schemes. There is no condition that employers had previously applied under
the CRJS to be eligible under the schemes, so businesses which experience
new difficulties because of COVID-19 from 1 November will be supported.
Businesses will also be able to make claims under both schemes for
different employees, whose work may be affected by COVID-19 in different
All small and medium-sized companies with fewer than 250 employees are
eligible under the schemes. Businesses exceeding that head-count threshold
will be eligible if their turnover has fallen due to COVID-19 compared to
the previous year, as evidenced by VAT returns and subject to a Financial
The UK government will not prohibit claims by larger businesses that make capital distributions such as dividend payments
to shareholders, but discourages those businesses from doing so. There is a
carve-out for UK registered charities with more than 250 employees — these
employers will not have to comply with any financial impact assessment.
Fully funded public sector employers will not be able to claim grants under
the schemes. However, partially funded employers will be able to claim only
if their privately generated funding was adversely impacted by COVID-19.
In addition to the discrete eligibility criteria tied to each scheme, as
before, employers with a UK, Channel Island or Isle of Man bank account,
that have enrolled on PAYE online, will be eligible to claim grants under
Employees who were on their employer’s PAYE payroll and had a Real Time
Information payment submission notified to HM Revenue & Customs on or
before 23 September 2020, may be claimed for under the schemes. Employees
whose employment ceased after 23 September could be rehired by their
employer and a claim could be made under the schemes, although there is no
obligation on the employer to do so.
If an individual was treated as an ”employee” for income tax purposes, the
individual would be considered an employee for the purposes of the schemes
(accordingly, agency workers would generally be considered as employees
For advice in relation to either scheme, or the Job Retention Bonus, please
contact Dan Peyton or Adam Penman.
McGuireWoods has published additional thought leadership analyzing how companies across industries can address crucial business and legal issues related to COVID-19.