On Wednesday, 8 July 2020, the Chancellor Rishi Sunak announced a series of measures designed to protect existing jobs, create thousands of new jobs in every part of the country and give businesses the confidence to retain and hire employees in the wake of Covid-19.
With the furlough scheme winding down, ready to come to an end in October, many are concerned that affected businesses will be forced to make tens of thousands of employees redundant. Therefore, in order to encourage businesses to stand by their employees the Government has announced, the Job Retention Bonus Scheme.
Under the scheme, employers will be awarded a £1,000 bonus for every employee they bring back from furlough who remains in employment until the end of January 2021. To be eligible for the bonus, employees must earn at least £520 a month (the lower earning limit for national insurance) between November 2020 and January 2021.
The Chancellor confirmed that employees returning must not be “returning for the sake of it and need to be doing decent work”. He also confirmed that payments would be made from February 2021.
In a move directed at creating jobs for 16 to 24 year olds, Mr Sunak announced a “kickstart scheme” that will directly pay employers to create new jobs for those in this age group, who are at risk of long-term unemployment. For each ‘kickstarter’ job, the Government will cover the cost of 25 hours’ work a week at the National Minimum Wage. Employers will be able to top up this wage if they wish.
In addition, there will be a total of £1.6 billion invested into increasing employment support schemes, training, and apprenticeships to help unemployed young people, who are amongst the worst hit by the crisis. The announcement included:
- £2,000 given to businesses for each apprentice they hire under the age of 25.
- £111 million invested to triple the number of traineeships in 2020-21.
- £17 million of funding to triple the number of sector-based work academy placements in 2020-21.
- £900 million invested to double the number of work coaches.
- £32 million investment into National Careers Service.
Whilst the above schemes will be welcome news for some employers, it is unlikely to offer much solace to those making the difficult decision about whether or not to proceed with substantial job cuts. There is also a lack of detail on how the schemes will work in practice, so more guidance needs to be provided to help employers know where they stand once the Coronavirus Job Retention Scheme ends in October.
Further details are expected to be announced by the end of the month. We will ensure to update you on the finer details once they are issued.
If you would like further information on what the new schemes might mean for you, please contact James Simpson on 01494 478689 or at email@example.com or Debbie Sadler on 01494 478671 or via email at firstname.lastname@example.org.