Employment Law Update – the JSS Open

Yesterday, 22 October 2020, the Chancellor announced changes to the original Job Support Scheme (JSS) (further details here) . This scheme will from now be known as the JSS Open.

The changes were announced following a very poor response from businesses in Tier 2 who are already suffering from a decline in business activity as a result of the restrictions, despite not being forced to close.

The additional financial support under the JSS Open will be provided to businesses and workers in all Tier systems during the winter months across the UK. The JSS Open is due to come into effect for a period of six months from 1 November 2020 and will replace the current furlough scheme.

The following changes to the JSS Open were announced yesterday:

1. For an employer to claim under the JSS Open, employees are required to work a minimum of 20% of their normal working hours, instead of 33% as originally announced. The employer is still required to pay the employee’s wages for hours worked but this change will mean that employees can work as little as one day a week. The employer is still responsible for paying National Insurance and pension contributions.

2. In respect of the hours not worked:

(a) the employer is only required to contribute 5% of the employee’s wages (up to a maximum of £125 per month, with the discretion to pay more if they wish), instead of 33% of wages as was originally announced.

(b) the government will subsidise 61.67% of the employee’s wages for hours not worked (up to a maximum contribution of £1,541.75 a month). The cap on the government’s contribution has doubled.

It is expected that these changes will significantly relieve the financial burden on employers and will incentivise them to a far greater extent to retain staff rather than make them redundant.

The Chancellor also said that state grants for self-employed people unable from 1 November to carry out their usual work will be doubled, from 20% of previous earnings to 40%, increasing the cap from £1,875 to £3,750.

Finally, no changes have been announced to the Job Support Scheme Extension (further details here) which applies to businesses that are legally required to close. This scheme will from now be referred to as the JSS Closed.