Job Retention Bonus for Employers
The Chancellor, Rishi Sunak, has announced a new job retention bonus as part of the Government’s Plan for Jobs 2020. Under this initiative, employers who bring workers back from furlough and continue to employ them between November 2020 and January 2021 will qualify for a £1,000 ‘job retention bonus’.
The Chancellor has been under pressure to extend the Coronavirus Job Retention (furlough) Scheme, particularly for employers in the retail, leisure and hospitality sectors, but Sunak has said that it would be “irresponsible” to keep the furlough scheme going after 31st October. Sunak has pledged to wind down the furlough scheme “flexibly and gradually” and said that this phase of the post-pandemic recovery will focus on supporting jobs through skills development, creating jobs through infrastructure investment and protecting jobs through incentives for consumers.
In order for employers to be eligible for the job retention bonus, their employees must earn at least the lower earnings limit for National Insurance (i.e. £520 per month) between November and January. The amount of the retention bonus of £1000 is the same for each employee, irrespective of the employee’s actual wages. The bonus will be paid from February 2021.
Further measures under the Plan for Jobs scheme include:
· A ‘Kickstart Scheme’ of work placement support for young people aged between 16 and 24, whereby employers will be able to subsidise the wages of people aged 16-24 that are claiming Universal Credit and at risk of long-term unemployment. Funding is available for each six-month job placement and will cover 100% of the National Minimum Wage for 25 hours a week. Employers will be able to top this wage up.
· Businesses will be given £2,000 for each new apprentice they hire under the age of 25. This is in addition to the existing £1,000 payment the Government already provides for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
· A £111 million investment to triple the scale of traineeships in 2020-21, ensuring more young people have access to high quality training.
Further details of the job retention bonus will be provided later in July.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.