What is The New Job Retention Bonus?

What is The New Job Retention Bonus?

You may have thought that our last update made in respect of the changes to the Coronavirus Job Retention Scheme (CJRS), including its winding down and flexible furlough (which can be found here), would have been our last update. However, this brief update outlines the new job retention bonus announced on 8th July.

So what is it?
Essentially, employers will be paid a £1,000 Job Retention Bonus (JRB) for each employee they bring back from furlough and continuously employ through to January 2021.

For businesses to be eligible for the bonus, the employee must be paid at least £520 on average in each month from November 2020 to the end of January 2021 (which is the equivalent to the national insurance lower earnings limit).

The Chancellor has stated that if the government paid the bonus for every one of the 9 million workers who have accessed the CJRS, "this would be a £9bn policy to retain people in work".

Is it the same amount for all employees or does it vary dependent on the employees wages?
The bonus amount is the same for each employee irrespective of the employee's actual wages. Obviously, the higher the employee earns, the less of an incentive the bonus will be.

Do employers need to consider the JRB as an alternative to redundancy?
Potentially this should be considered during consultation meetings, in order to mitigate the need for redundancies. However for most employers this may not be sufficient to remove the requirement to make redundancies (though it may delay the need).

What other help will there be for employers?

  • Kickstart scheme: A new "kickstart" job creation scheme will be established for young people on Universal Credit (between 16 and 24) who are at risk of long-term unemployment. The government will pay the wages of new workers (up to 25 hours per week at national minimum wage) meeting these criteria for a period of 6 months, while they complete a "job placement". The scheme will open for applications in August, so the first placements can start in the Autumn.
  • Training and apprenticeships: The number of Jobcentre work coaches will be doubled, in addition to further investment in traineeships and sector-based work academy placements to triple the number of placements available during 2020 and 2021. There will be a £32 million investment in the National Careers Service. New apprenticeships will be supported by bonuses, with employers entitled to a payment of £2,000 for each apprentice they take on under the age of 25 and £1,500 for each apprentice aged 25 or over.

The information contained in this article is for information purposes only and is not intended to constitute legal advice. Should you require assistance on the employment law implications of the COVID-19 pandemic, the support available for businesses and HR queries, our experienced advisors will be able to provide practical advice to help your business through the process. For advice, contact our employment & HR team at employment@greenawayscott.com or call us on 029 2009 5500.