The Job Support Scheme – How Does It Work

The Job Support Scheme – How Does It Work

This Saturday is Halloween and, while prior years have seen the importance of this event increase for our sector, this year will be a markedly different… but I feel like I have been saying that a lot recently. The bigger scare might have come from the end of the Furlough scheme but luckily it is being replaced by the (newly enhanced) Job Support Scheme, the next phase of government support for employees. So how does it work?

 

Open & Closed

 The scheme is split into two elements; the open version that is designed for businesses with reduced trade and the closed version that is aimed at business that are forced to closed due to government restrictions.

 

Employer Eligibility

There are various criteria set out that define eligibility for each scheme. Both schemes require the company to have enrolled for PAYE online and to have a UK bank account.

 

For the closed scheme eligibility is defined as follows:

Businesses that are forced to close due to coronavirus restrictions set by one or more of the four UK governments. For the closed scheme, claims can only be made for the time where the forced closure was in place.

 

For the open scheme it depends on the size of the business. If you are under 250 employees you are eligible. If you are over 250 employees you need to go through a financial impact test. Details of the test are available on the gov.uk website but can broadly be summarised as – if July-Sept revenue in 2020 was lower than the same period in 2019 you are eligible (there are nuances though so do check). This does also imply that if you have more that 250 employees and were not trading in 2019 (i.e. a newly formed business) you would not be eligible, although we have not had this confirmed.

 

Employers can claim for both schemes at the same time, as they may have multiple sites affected in different ways.

 

Employee Eligibility 

Employees are eligible if they were on an RTI submission to HMRC prior to the 23rd September. Employees are no longer eligible if they are serving notice or have been made redundant.

 

To claim on the closed scheme the employee should not be working for the period of time they are claiming for.

 

To claim on the open scheme the employee needs to work at least 20% of their usual hours.

 

Employees cannot, therefore, be on both schemes on the same day.

 

Any employee placed on either scheme needs to have the agreement confirmed to them in writing and this agreement needs to last a minimum of 7days.

 

Claim amounts 

For the closed scheme the employee should receive 66.6% of their usual pay, capped at a maximum of £2083.33 per month. All of this can be claimed back from the government.

 

For the open scheme the government will pay 62.5% of the difference between their usual hours and their actual hours up to a maximum of £1541.75 per month. The employer is required to pay 5% of the difference up to a maximum of £125.

 

For either scheme the employer can choose to top up the employee if they so wish. The employer is also liable for NI, pension and holiday accrual.

 

Usual Pay and Usual Hours 

This is more complicated than it was for furlough although broadly calculated on the same principles.

 

For Salary it is the higher of their March 2020 or Sept 2020 salary and hours.

 

For variable pay staff it is the higher of:

 

  • Tax year 2019/20 average pay/hours
  • Comparable calendar period from last year pay/hours
  • Average pay/hours worked from the 1st Feb 2020 to the 23rd Sept (or from when the employee started if later)
  • This should include any hours paid as annual or statutory leave.

 

Holiday 

Exact guidance has not been given on holiday, it is therefore assumed (for now) that employees can take holiday while on the agreement and it will be treated in a similar way to furlough, i.e.;

 

  1. Closed scheme
    1. Government pay 66.7% of usual pay up to a cap of £2083.33 and the employer is required to top it up to their usual pay.
  2. Open scheme
    1. If no hours worked and holiday does not exceed 20% of usual hours
      1. Employer pays for holiday
    2. If no hours worked and holiday hours exceed 20% of usual hours
      1. Employer has to pay 20% of usual hours
      2. Government will contribute 62.5% of the remaining 80% up to a cap of £1541.75
  • Employer will contribute 5% up to a cap of £125
  1. Employer tops up the difference to ensure employee receives usual pay
  1. If less than 20% of usual hours worked
    1. Employer pays difference of hours worked to 20% of usual hours
    2. Government will contribute 62.5% of the remaining 80% up to a cap of £1541.75
  • Employer will contribute 5% up to a cap of £125
  1. Employer tops up the difference to ensure employee receives usual pay
  1. If more than 20% of usual hours worked
    1. Government will contribute 62.5% of the difference between hours worked and usual hours up to a cap of £1541.75
    2. Employer will contribute 5% up to a cap of £125
  • Employer tops up the difference to ensure employee receives usual pay

 

Claiming 

The claims process opens on the 8th December so this will need to be funded out of cashflow until the grants are received.

 

Summary 

The improved version of the JSS is a big improvement for the sector on the previous version and should be seriously considered by most operators. We would recommend talking to your scheduling/payroll provider and getting an early understanding of how they will support you.

 

Government has also stated that they will update a number of their points of advice by the end of October. This hasn’t been released yet, but we will update when it has. Hopefully this won’t be the Halloween scare, we’ve suffered enough.

 

If anyone would like clarification on any of the above points, please get in touch by emailing richard@s4labour.co.uk

 

Richard Hartley

Chief Product Officer & Pumpkin Carver

The effect of the curfew on hourly sales

The effect of the curfew on hourly sales

Analysis from S4labour shows that hospitality sales are 18.27% below what they were before the curfew, comparing week 37 & 38 to week 40 & 41 (before and after curfew).

When we look at the 18.27% decrease broken down per hour (graph below), each hour has been impacted which reflects the overall industry slump; a fall in consumer confidence since the curfew. The hours from 6am to 6pm are down on average 16.1%.

A noticeable impact has also been shown in hour 22 (9pm to 10pm) as it is down almost 40%, indicating that the curfew has not only has an impact after 10, but the run up until the time of closure. The place must be cleared by 10, and most people are likely to head home within the hour.

Futhermore, when you look at the food and drinks split between hours (below), it can be seen that food has been hit harder than drink. This is a reflection on a few things. Firstly, most places are unable to offer a second dinner sitting: whereas previously there can be an early, 7:30 sitting, and another can be fitted in later, this is now not possible, therefore food sales are heavily diminished. Secondly, if everyone has to be out by 10pm, it does not offer much opportuity to sell food right up until that time. No one wants to rush their evening meal, but ask someone to squeeze in a last drink at 9:30 and they will not say no.

Richard Hartley commented: “Overall the curfew has impacted sales, perhaps just when the industry was starting to get back on it’s feet.”

Last week’s sales like for like %

Last week’s sales like for like %

Analysis from S4labour shows that hospitality sales from last week were down 12.8% compared to last year, however when we take a closer look, sales in dry-led venues are up 16% on last year, yet wet-led venues are down 40%. Whilst London is still suffering more than the rest of the country, wet-led venues are also taking a big hit.

If we look at a little more detail, it can be seen that in dry-led venues, both drink and food sales are up compared to last year, whereas both types of sales are down in wet-led venues. What we can take from this is that people are increasingly going out for a sit-down meal with drinks rather than heading out to a pub or bar for a drink. It is also worth noting that roughly 10% of sites are still yet to open after lockdown measures were introduced, more of which are likely to be wet-led venues. This continued level of decline since March within wet-led venues is unprecedented and extremely worrying for the industry.

Chief Product Office Richard Hartley commented: “venues that are established as table service have an already adapted way of working, and greater consumer confidence, alongside much larger capacity with the given restrictions.”

 

 

A second look at sales, after the curfew was introduced.

A second look at sales, after the curfew was introduced.

Analysis from S4labour that hospitality sales from last week were down 21.2% compared to the week before the curfew (2 weeks prior), with sales of food down 19.1% and drink sales down 23.2% on two weeks before.

While weekly like-for-likes continue to fall, like-for-like sales are down 13.5% when comparing last week with the same week in 2019, with London suffering a 38.4% decrease in sales when compared to last year, versus a 5.2% decrease in the rest of the country. The figures suggest that London is adjusting to a new decreased level of trading, and that may take a while to recover. It is also worth noting that roughly 10% of sites are still yet to open after lockdown measures were introduced.

Chief Product Office Richard Hartley commented “This level of decline is unprecedented and worrying for the industry, although the weather may have played a part. As the curfew has been introduced, diners and drinkers will start to head out earlier, as a closer look at sales shows that a larger proportion of sales came in earlier. Behaviours may continue to change as we adjust to the new timings.”