In September 2020, it was estimated that there are currently 9.6 million people on furlough from 1.2 million different employers. Many feared that the end of the furlough scheme would mean that employees faced a cliff edge as of 31 October and for many businesses the original successor – the Job Support Scheme (“JSS”) – was unlikely to see off the wade of imminent redundancies given the costs businesses would face in implementing the scheme. However, the government has since caved into pressure to revise and significantly expand its plans to support wages by electing to shift the financial cost to the public purse.

On Thursday 22 October, the Chancellor of the Exchequer announced the JSS Open and JSS Closed. For employers who continue to operate but face decreased demands, they can obtain support from JSS Open; whereas a business legally required to close as a direct result of coronavirus restrictions can obtain support from JSS Closed.

A summary of the applicable schemes:

Furlough –

From 1 July to 31 October 2020

Job Support Scheme Open – From 1 November 2020Job Support Scheme Closed – From 1 November 2020Job Retention Bonus

Employees receive 80% of pay, with the government’s contribution capped at £2,500 per month



Employees must work a minimum of 20% of their usual hours and will receive at least 73% of normal wages, where they earn £3,125 a month or less.


Employees who cannot work due to restrictions will receive 2/3rds of their normal pay, capped at £2,083.33 per month

£1,000 bonus paid to employers where employees employed until at least 31 January 2021 and have not been served with notice on or before 1 February 2021
Employer contribution
  • 20% (at least £625 per month)
  • ER NICs and pension
  • Usual salary for at least 20% of usual hours worked; and
  • 5% of reference salary for any unworked hours, up to a maximum of £125 per month (with the discretion to pay more).


  • Class 1 employer NICs or pension contributions
Government contribution
  • 60% of pay
  • 61.67% of reference salary for unworked hours, capped at £1,541,75 per month.
  • 67% (2/3rds) of pay


To be eligible, employees are those who were on payroll between 6 April 2019 and 23 September 2020.  If employees ceased employment after 23 September and were subsequently rehired, then employers can claim for them. Unlike furlough, employees cannot be under redundancy notice or served with notice while in receipt of either the JSS Open or Closed.

The Schemes are available to all SMEs but additional eligibility criteria apply to employers with more than 250 employees, who would need to have undertaken a financial impact test.

Job Support Scheme Open

Employees must work a minimum of 20% of their “usual” hours. The government will then pay 61.67% of an employee’s normal wages for hours not worked. This is capped at £1,541.75 per month. The employer must then pay only 5% towards any unworked hours, capped at £125.

Employers must reach a written agreement with their employees that they have been offered a “temporary working agreement”. Inevitably this will involve staff consultation, which may be undertaken as part of a wider redundancy consultation process.

Job Support Scheme Closed

For many working in the entertainment and leisure industries with continuing coronavirus restrictions, the JSS Closed will provide support as employers simply will not have the funds in place to continue to pay wages on a forced shut-down. The JSS Closed provides employees affected by a forced closure with two-thirds of their wages, capped at £2,083.33 per month, for the time that employees are unable to work. Again, HMRC confirms that to be eligible for the grant, employers must have reached a written agreement with their employees that they have been instructed to and agree to stop working for a minimum of seven consecutive calendar days or more.

However, the current government factsheet confirms that the scheme will only cover businesses that, as a result of restrictions set by one or more of the four governments in the UK, are legally required to close their premises. This includes premises restricted to delivery or take-away services. But it is important to note that businesses required to close as a result of specific workplace outbreaks by local public health authorities are unlikely to be eligible for the JSS Closed.

Employee taxes and pension contributions

The employer remains responsible for NICs and pension contributions, unless the employee has opted out or stopped saving into their pension. Employers must also deduct income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.

It should also be noted that employers cannot agree to reduce wages below the amount claimed, even if this includes a salary sacrifice scheme, for example.

If you have any questions on the schemes outlined in the article, please contact our employment law specialists Asha Kumar, Angharad Harris and Nathan Donaldson.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.