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Job Retention Bonus: The Chancellor’s Summer Statement

Yesterday afternoon in his Summer Statement, Chancellor, Rishi Sunak announced the new “Job Retention Bonus” policy. It was also confirmed that the Coronavirus Job Retention Scheme (Scheme) will not continue beyond October.

The new policy is aimed at incentivising employers to keep as many staff as possible in work after the Scheme comes to an end. The Chancellor confirmed that the government will pay UK employers a one-off payment of £1,000 for each furloughed employee who returns to work and remains with the business through to the end of January 2021.

The Job Retention Bonus payments will be made in February 2021 and further details of the policy will be published in July. To be eligible, employees must be earning above the lower earnings limit of £520 per month between the end of October 2020 (when the Scheme ends), and the end of January 2021.

Since the start of the Scheme over 9 million people have been furloughed and £25.5 billion in wage subsidies had been paid to employers. Whilst the Scheme has clearly been a lifeline to thousands of employers across multiple sectors; employers are now beginning to prepare for it to come to an end in October and the reality of furloughed employees returning to work. For many, widespread redundancies are inevitable.

The £9.4 billion policy is aimed to reduce the number of redundancies made thus reducing the levels of unemployment. Sunak said yesterday “If you stand by your workers we will stand by you.”

The Chancellor also announced further grants available to employers which aim to support young workers including:

  • £1,000 grant per trainee for employers who take on new trainees aged 16-24 in England, aiming to triple trainee numbers;
  • £2,000 grant for employers per apprentice under 25 hired, £1,500 for those over 25, for six months starting 1 August (in England); and
  • Payments cover national minimum wage for 25 hours per week, plus national insurance and pension contributions for Great Britain.

If you have any questions about the Job Retention Bonus, please email or call our Employment Law team today on 011 3 207 0000.

 

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Paul Kelly

Partner and Head of Employment
Employment Law
PKelly@LawBlacks.com
0113 227 9249
@PaulLawBlacks
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Paul Kelly Blacks Solicitors LLP