Employers Prepare for New U.K. Job Support Scheme

New U.K. Job Support Scheme

The new Job Support Scheme, which is designed to protect jobs in businesses facing lower demand over the winter months due to the COVID-19 pandemic, took effect on November 1, 2020, and will be in place for six months. It replaces the U.K. Coronavirus Job Retention Scheme (commonly known as the furlough scheme), which came to an end on October 31, 2020. The new Job Support Scheme will provide two different tiers of support: the JSS Open Scheme for businesses which are allowed to be open but are facing reduced trade because of the COVID-19 pandemic; and the JSS Closed Scheme for businesses that are legally required to close under COVID-19 regulations.

How Will the Job Support Scheme Work?

• Employers with a U.K. bank account and registered for Pay As You Earn (PAYE) online will be able to access the Scheme. Additional eligibility criteria will apply depending on whether the employer is claiming under the JSS Open Scheme or JSS Closed Scheme — see further below.
• Employers will be able to claim for employees who were on their payroll between April 6, 2019 and September 23, 2020.
• Employers do not need to have previously used the furlough scheme in order to be eligible and will still be able to apply (if eligible) for the Coronavirus Job Retention Bonus.
• The new working arrangements must be agreed to by employees and documented in a written agreement, which HMRC may subsequently request from employers. The agreement must be in place for a minimum of seven days.
• Employees can be moved on and off the Scheme, but cannot be made redundant or given notice of redundancy whilst on the Scheme.
• Employers will continue to be responsible for employer National Insurance Contributions and pension contributions.
• Employers will be able to submit claims through a HM Revenue and Customs (HMRC) online portal fromDecember 8, 2020. 

Eligibility for the JSS Open Scheme

• Small and medium-sized enterprises (SMEs) will be automatically eligible for the JSS Open Scheme.
• Large businesses with over 250 employees will need to undergo a financial impact test to demonstrate that their turnover has remained equal or fallen as a result of the pandemic. The U.K. government expects that whilst accessing the JSS Open Scheme large businesses and their corporate groups will not make any capital distributions, such as dividend payments or share buybacks.
• An employee must work at least 20% of their usual hours* for which their employer must pay their usual pay.
• For every hour that an employee has not worked, the U.K. government will pay 61.67% of the employee’s usual pay (capped at £1,541.75 per month), the employer will pay another 5% (capped at £125 per month) and the employee will forfeit 27% of their normal wage, provided they earn £3,125 a month or less.

*The proportion of hours an employee is required to work under the JSS Open Scheme is subject to a review by the U.K. government after the first three months.

Eligibility for JSS Closed Scheme

• Any U.K. businesses that are legally required to shut their premises due to local or national restrictions will be eligible for the JSS Closed Scheme. This includes businesses restricted to delivery or collection only services. However, businesses which are required to close because of specific workplace outbreaks are not eligible.
• To be eligible, employees must cease work for a minimum of seven consecutive days.
• The U.K. government will support eligible businesses by paying two-thirds of employees’ wages, up to a maximum of £2,083.33 per month.
• Employees may also be entitled to Universal Credit.

Introduction of New Employer Obligations to Ensure Compliance with Self-Isolation Rules 

The Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020 (Regulations) which came into force on September 28, 2020, impose several obligations regarding self-isolation and notification which have implications for both employers and employees. The Regulations only apply to England, but other parts of the U.K. have implemented guidance that mirrors the Regulations.

Self-Isolation 

The Regulations make it a legal requirement for anyone who has tested positive for COVID-19, or who is notified by the NHS Test and Trace that they have come into contact with someone who has COVID-19, to self-isolate for up to 14 days.

Employers

The Regulations require employers to ensure that employees comply with their obligations to self-isolate. If an employer is made aware that an employee is required to self-isolate, it is an offence for that employer knowingly to allow the employee to attend any place of work or carry out any work in a place other than where the employee is self-isolating.

Employees

The Regulations also place a corresponding obligation on employees to notify their employer that they are required to self-isolate as soon as reasonably practicable and no later than the next working day.

Fines

Fines — starting from £1,000 for the first offence and rising to £10,000 for the fourth and subsequent offences — may be imposed on anyone who breaches their self-isolation obligations or on any employer who knowingly allows self-isolating employees to come to work.