The new Job Support Scheme
After much head scratching at the Treasury, the son of the furlough scheme has been unveiled. Aptly called a Job Support Scheme JSS). When the Coronavirus Job Retention Scheme finishes 31 October 2020, employers will need to register for the JSS which is being made available for six months from 1 November 2020.
The JSS aims to support viable jobs. The inference here is that if current jobs are no longer viable they will disappear.
It is difficult see how unemployment can be suppressed as a result of this change in tack; numbers are going to rise. Businesses that may have previously “moth-balled” staff, keeping them at home on furlough, will now face difficult decisions: who to keep on and who to let go.
At best, businesses that have a part-time role for existing staff will be obliged to cover the time actually worked and one-third of time not worked. Employers will also have to meet NIC and pension costs. Employees transferred to the JSS, working a third of their normal hours, will actually receive 77% of their full-time pay.
The JSS does shift the cost of non-worked hours from the Exchequer to the employer.
The other contentious issue that was not addressed by the JSS announcement concerns sectoral differences. Why are vulnerable sectors, the hospitality sector for example, supported to a larger degree than sectors who are less vulnerable to COVID disruption? What about our theatres and live music venues?
The JSS is a one-sized fits all shoe. Unfortunately, we all have different sized feet.
And then there are red-tape considerations. Employers reading this blog who have adjusted to furlough system requirements will need to accommodate changes to manage JSS payments. Your payroll team will need to take on any changes in compliance to join and administer JSS.
There are rumours that JSS payments to employers will be in arrears; more on this topic will follow as details of the JSS are released. Accordingly, there may be cash flow aspects that firms will need to consider.
Patently the JSS does offer support to employers, albeit at a reduced level, but many employers, especially those in vulnerable business sectors, will now face making staff redundant. Until we are able to resume sociable activity much of our economy will slip into hibernation. It may well be that the prince to wake these sleeping beauties will be a working vaccine. Only time will tell.
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