As the government designates more and more areas as coronavirus (COVID-19) alert level high, the chancellor has been forced to adjust the Job Support Scheme (JSS) which he first announced on 24 September 2020. The changes are aimed at those employers who can keep their business open but who are facing a decrease in demand.

In this article we look at these changes and how the new two-tier JSS will apply when it comes into force on 1 November 2020. 

Recap of the JSS 

The JSS announced on 23 September 2020 (weekly LELR 691) that from 1 November 2020, employers could receive a grant to pay employees for the hours they did not work because of a downturn in demand.

To be eligible for a grant, the employer had to provide the employee with work for at least a third of their hours and pay them for those at their normal rate of pay. For the hours that they did not work, the employee would receive two thirds of their normal pay, with the employer paying one third and claiming a government grant equal to one third (subject to a monthly cap of £697.92). The end result would see the employee being paid two-thirds of their pay for the two-thirds of hours not worked subject to the cap.

“JSS Closed”

On 9 October 2020, the JSS was extended (see weekly LELR 693) to provide a grant to cover the pay of workers whose employer was legally required to close as part of local or national coronavirus (COVID-19) restrictions. This is now referred to as “JSS Closed” and will see the government pay the employer a grant of 67 per cent of an employee’s pay up to a maximum of £2,083.33 a month.

“JSS Open” 

The JSS announced on 23 September 2020 is now “JSS Open” which the government says will assist businesses that remain open and will operate as follows:

  • Workers are required to work 20 per cent of their hours (instead of the previous 33 per cent) for which they will be paid their normal pay
  • The employee will be paid 66.67 per cent of their normal pay for the hours they do not work, with the government paying 61.67 per cent (up from 33 per cent) up to a maximum of £1,541.75 (previously £697.92) and the employer paying five per cent (previously 33 per cent) up to a maximum of £125 per month.


The employer will still be required to pay the employee’s National Insurance and pension contributions.

The government has applied a reference salary of £3,125 to calculate the caps. The JSS Open factsheet states that employees who work the minimum 20 per cent of their normal hours and whose normal pay does not exceed the monthly reference salary will receive 73 per cent of their normal wages. 

The overall impact of the change is that workers will have to work fewer hours than first proposed before their employer can claim the grant. As before, the worker will still not be paid for the one third of hours that they do not work.

JSS Open is still less generous than the Coronavirus Job Retention Scheme (CJRS) which, until the end of October, provides employees with 80 per cent of their wages. However, while there is nothing stopping employers from topping up employee pay above the JSS Open minimum levels, they cannot agree a reduction in wages below the amount claimed under the JSS Open, for example under a salary sacrifice scheme. 

Does the JSS Open apply to all employers?

No. It only applies to employers who can still operate but who have suffered a downturn in work as a result of the pandemic. 

Employers who have 250 employees or more will have to be able to demonstrate that their turnover has stayed the same or is lower than before the pandemic. Smaller employers do not have to demonstrate a fall in turnover to qualify.

Fully-funded public bodies are not expected to use JSS Open although partially-funded organisations are eligible where their private revenues have been disrupted. 

JSS Closed will apply to employers who have to legally close because of local or national restrictions.

Does JSS Open apply to all employees? 

For the employer to claim the government grant towards pay for hours not worked, the employee must be on the employer’s PAYE payroll between 6 April 2019 and 23 September 2020. Employees do not have to have been previously furloughed under the CJRS.  

And while employees must work at least 20 per cent of their hours, it is not clear if that is every week. Some employers, especially those in the hospitality sector, may not be able to provide work every week.  

The JSS Open factsheet states that while employees do not have to have the same working pattern every week, they must carry out short-time working for a minimum of seven consecutive days.  

The JSS policy document states that further guidance will be provided at the end of October when it is hoped that there will be clarification on whether an employee is required to work a minimum of 20 per cent of their hours in every seven-day period or whether the minimum working hours can be averaged out over a longer period. 

Employees who were made redundant after 23 September and are re-employed will also be covered by JSS Open. 

How is pay calculated? 

Employees’ pay under JSS Open is calculated in a similar way as it is under the CJRS. Only regular payments are included in calculating the reference salary with discretionary payments excluded.

For employees who are paid a fixed salary, the reference salary is the greater of:

  • The employee’s pay in the last pay period ending on or before 23 September 2020
  • The employee’s pay in the last pay period ending on or before 19 March 2020 (which may be the same salary used to calculate pay under the CJRS).


For employees whose pay is variable, the reference salary is the greater of:

  • The wages earned in the same calendar period in the tax year 2019 to 2020
  • The average wages payable in the tax year 2019 to 2020
  • The average wages payable from 1 February 2020 (or the employee’s start date, if this is later) until 23 September 2020.


Where employees undertake training, they must be paid by the employer at the employee's full rate of pay. 

For JSS Open, the National Minimum Wage must be paid for all hours worked or treated as worked. 

For those on parental leave such as maternity, adoption, paternity, shared parental leave and parental bereavement leave, the JSS policy document states that the government will introduce legislation to ensure they do not lose out as a result of being on JSS. 

No guidance has yet been provided as to how an employee’s reference salary is to be calculated for those on JSS Closed. 

Examples of how the calculations apply in practice are included in the JSS policy document.

How are an employee’s “usual hours” calculated? 

For employees who work a fixed number of hours and whose pay does not vary according to the number of hours they work, the usual hours are the greater of:

  • The hours the employee was contracted for at the end of the last full pay period ending on or before 23 September 2020
  • The hours the employee was contracted for at the end of the last full pay period ending on or before 19 March 2020 (which may be the same number of hours calculated under the CJRS).


It is not clear how the hours will be calculated where an employee moved to part-time working under flexible furlough and further guidance is awaited. 

For employees whose number of hours vary and/or whose pay depends on the number of hours they work, the number of usual hours is the higher of:

  • The number of hours worked in the same calendar period in the tax year 2019 to 2020
  • The average number of hours worked in the tax year 2019 to 2020
  • The average number of hours worked from 1 February 2020 (or the employee’s start date if later) until 23 September 2020.


This should include hours paid as annual leave and statutory leave. The fact that an employee is expecting to work more or fewer hours in the future cannot affect how the hours are calculated as above. 

What are the other key features of the scheme? 

Employees cannot be made redundant or given notice of redundancy during the period the employer is claiming the grant for them. 

Employers are required to reach a temporary working agreement with employees or with a trade union where the union is recognised by way of collective agreement.

The agreement must be available for view by HMRC on request. 

As the JSS Open will apply from 1 November, unions have a short window to negotiate with employers. In doing so, we advise that any temporary working arrangement makes clear: 

  • It is a temporary expedient for a prescribed number of months and not a permanent variation to terms and conditions;
  • That the calculation of notice pay and statutory redundancy pay will continue to be calculated on the basis of full hours and pay where the employer proposes redundancies at any point in the future; and   
  • How holiday pay will be calculated including where a payment is made in lieu of untaken holiday if the employee is made redundant. 



While the improvements to JSS Open are welcome, it remains to be seen whether they offer enough to encourage employers to retain workers, particularly in those businesses in high alert areas which are facing a potentially long-term downturn. Much may depend on how the minimum hours’ requirement will apply in practice. It is unacceptable that, with less than one week to the end of the CJRS, further clarification on the JSS is still awaited.