Chancellor announces Coronavirus Job Retention Bonus
In his Summer Statement, the Chancellor, Rishi Sunak, announced the introduction of the Job Retention Bonus.
The news followed the confirmation that the Coronavirus Job Retention Scheme (CJRS) will close, as planned, at the end of October, with the Chancellor stating that “leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before”.
Currently, the CJRS offers employers grants of 80 per cent of a furloughed employee’s usual salary, capped at £2,500 per month, as well as the associated minimum automatic pension contributions and Employer National Insurance Contributions (NICs).
Employees that have been placed on furlough leave will receive 80 per cent of their usual pay, capped at £2,500, until the end of the scheme in October. Employers have also been able to bring back employees on a part-time basis through the Flexible Furlough Scheme since 1 July, with employers then claiming a grant based on the usual hours not worked.
The announcement of the Job Retention Bonus means that employers will receive £1,000 for every previously furloughed employee that is retained and kept in employment until January, as long as they are paid at least £520 per month, with further details set to be published on the scheme later in July.
With many employers now considering how to bring back furloughed employees, and the latest research finding that one-quarter of businesses are considering redundancies, the Job Retention Scheme represents an incentive to look at ways to retain staff after the CJRS concludes in October.
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