9th July 2020

Legal Issues – Job Retention Bonus

Following the Chancellor’s Summer Statement on 8 July 2020, some further changes are planned for employers and employees to help with the recovery process that lies ahead.

Key to the Government’s plan to help all parties recover from lockdown and the end of the Job Retention Scheme on 31 October 2020 is the announcement of a ‘job retention bonus‘ which is to be introduced.  While this has no immediate impact, the intention is that the Government will make a one off payment to employers of £1,000.00 for every furloughed employee who remains continuously employed by them until at least the end of January 2021.  As with any scheme of this nature, conditions have to be met and the most important one is that payment will only be made if the employee during that 3 month window from 1 November 2020 until 31 January 2021 has been earning in excess of the lower earnings limit of £520.00 (on average) per month.

Given that an employer will have had to make additional contributions to employees under the diminishing scale of the CJRS for August, September and October, employers may well be asking how much of an incentive this payment is to keep employees with them rather than making them redundant.  Time will tell how successful this scheme is but it is to be hoped that there is a strong level of take up to reduce the number of compulsory redundancies.

As part of the plan to help, details were also included in the Chancellor’s statement about a new ‘kick start scheme’ to provide 16-24 year olds with work placements for 6 months.  In addition, he announced the introduction of an apprenticeships bonus which means that between 1st August 2020 and the 31st January 2021, employers will be paid a £2,000.00 bonus for each additional apprentice they take on under the age of 25, and £1,500.00 for each additional apprentice they take on aged 25 and over.

If you have any questions on any of the issues mentioned in the above article, please contact Russell Eadie.

9th July 2020