Job Retention Scheme: Employer contribution now due and the Job Retention Bonus
Over the weekend, the first stage of the phasing out of the CJRS came into effect. From Saturday 1st August, employers who continue to have staff on furlough must now pay each employee’s NI and pension contributions. The government has said that for the “average” employee this will equate to an employer contribution of around £70.
The second stage of the phasing out will take effect in a month’s time, on 1st September, which will see the employer contribution to increase further to include 10% of wages. From 1st October, and during the final month of the furlough scheme, employers will be liable to pay NI and pension costs and 20% of wages.
Hoping to lessen the impact of the withdrawal of the Job Retention Scheme on 31st October, on 8th July the government announced its intention to pay employers a Job Retention Bonus of £1,000 for each furloughed employee whom they keep in meaningful employment until January 2021. On Friday the government published further details about the bonus scheme which can be found here.
Headline points from the publication include:
- The Job Retention Bonus will be a one-off payment of £1,000 for every employee who they previously claimed for under the scheme and who remains continuously employed through to 31st January 2021.
- Eligible employees must earn at least £520 a month on average between 1st November and 31st January
- Employers will be able to claim the bonus after they have filed PAYE for January and payments will be made to employers from February 2021
- All employers are eligible for the scheme, including recruitment agencies. Employers must keep their payroll up to date and accurate as a failure to do this might jeopardise an ability to claim.
- Employers will be able to claim for employees who:
- were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme
- have been continuously employed from the time of the employer’s most recent claim for that employee until at least 31 January 2021.
- have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI;
- have up-to-date RTI records for the period to the end of January
- are not serving a contractual or statutory notice period, that started before 1 February 2021
- Employers can claim the Job Retention Bonus for all employees who meet the above criteria, including office holders, company directors and agency workers, including those employed by umbrella companies. The above criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked and rate of pay.
If you would like to discuss the implications of the latest developments, then please contact a member of the Employment Law Team on 01274 864999.