In what is presumably an attempt to avoid widespread redundancies triggered by the closure of the Coronavirus Job Retention Scheme in October, the Chancellor has announced a new ‘jobs retention bonus’. 

Employers who bring furloughed staff back to work and continuously employ them through until January 2021 will be paid a bonus of £1000 for each furloughed employee. This bonus payment will go to the employer and is not intended to be something that is passed on to the employee in question.

However, the bonus will not be paid if employees are brought back and left to do nothing.  The employees in question must earn at least £520, on average, in each month from November to January.  This is the equivalent to the Lower Earnings Limit for National Insurance.

The employer’s job retention bonus payments will be made in February 2021.

According to the Chancellor, Rishi Sunak, in his statement to the House of Commons when making this announcement, if all employers with furloughed staff take up the bonus, it will be a £9billion scheme.

At the same time as announcing the jobs retention bonus, the government also revealed that it will pay

  • £2000 to businesses who hire young apprentices; and
  • £1500 to businesses who hire apprentices aged 25 and over.

It remains to be seen what - if anything - the government will do to cover off any potential arguments that this policy is discriminatory on the grounds of age.

The government will also introduce a new Kickstart Scheme to fund the direct creation of high quality jobs for young people at the highest risk of long-term unemployment. A new ‘Talent Retention Scheme’ will also be introduced, with a particular focus on the construction industry.

The government’s full Plan for Jobs statement is available here.

Further details of how the job retention bonus scheme will work in practice will be published at the end of July.  As ever, the devil will be in the detail.  It is not clear at the moment when the scheme will start, or how the average monthly pay will be calculated or what mechanism will be used for the payment of the bonus.

We will keep you updated via these Briefings and our dedicated Employment Law Twitter feed: @TLT_Employment

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions.

Date published

08 July 2020


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