On 8 July, the UK Chancellor announced proposals to help UK businesses have the confidence to retain and hire staff. The Government announced that the Coronavirus Job Retention Scheme has helped employers pay the wages of 9 million employees across the UK. However, the scheme will come to an end on 31 October 2020 and as the economy is now beginning to reopen, the summer economic update looks at the Government’s second phase of its response to the Coronavirus with a targeted Plan for Jobs.
The Plan includes the following proposals to support employers:
- A Job Retention Bonus. This will be introduced to help firms keep furloughed workers. UK employers will receive a one off bonus of £1000 for every furloughed employee who is still employed as at 31 January 2021. Eligible employees must earn above £520 per month between the end of CJRS and the end of January 2021. Further details will be announced on this bonus at the end of July. Interestingly since the announcement of the bonus some large employers have stated that they would return any such bonus to the Government.
- The Kickstart Scheme: This will apply to 16-24 year olds who are claiming universal credit and are at risk of long term unemployment. Funding will be available for a six month job placement and will cover the relevant National Minimum Wage for 25 hours per week. Employers can top up this amount for the employee.
- Additional funding for apprenticeships: Employers will receive an additional £2,000 for each new apprentice they hire aged 25 and over from 1 August 2020 until 31 January 2021.
As mentioned, further information is expected on the Job Retention Bonus by the end of July. Employers will need to be considering if this bonus will ensure that they do not need to make employees redundant, and, if they have already started a redundancy consultation process, what approach they should now be taking.