Moving Forward: Employer Support Post-Furlough
In a speech to Parliament on Wednesday 8th July, the Chancellor Rishi Sunak announced a number of schemes which would look to provide further support to businesses following the closure of the Coronavirus Job Retention Scheme (CJRS) on 31st October.
During the speech, the Chancellor re-stated the government’s intention to close the CJRS at the end of October and made clear that whilst there had been calls for the scheme to be extended it “could not and should not” continue indefinitely. It seems very unlikely at this stage that there will be any u-turns in relation to the CJRS end date but, as we know, there have been many twists and turns since the scheme’s inception since March and if there are any changes in this respect, we will let you know.
Although there are fears that millions of jobs will be at threat following the closure of the CJRS in October, the Chancellor remained positive when outlining the new schemes which hope will protect jobs beyond October, both in the general sense and in relation to specific industries and young people aged 18-24. As the government releases further information about these schemes over coming days and weeks, further updates will be provided.
As things currently stand we can expect to hear more about the following which appear to form the foundations of the government’s support measures moving forward.
Job Retention Bonus
Subject to certain conditions being met, eligible employers will be able to access a “job retention bonus” in respect of furloughed employees who are brought back into work. Few details have been released about the scheme but we do know that if an employer brings an employee who was furloughed back in to work and continues to employ them until January 2021, the government will pay the employer a £1,000 bonus per employee. The employee must be paid a minimum of £520 each month from the end of the CJRS through to January 2021.
The Job Retention Bonus is aimed at all employees who have been furloughed and does not appear to be dependent on whether they have already returned to work or are currently working flexibly under the furlough scheme.
Payments will be made from February 2021 and further details regarding the mechanics of the scheme have been promised by the end of July.
The “Kickstart Scheme”
This scheme will see employers receiving a direct payment if they create any jobs for any 18-24 year at risk of long-term unemployment. It is specifically aimed at those 18-24 year olds who are on Universal Credit and who are considered most at risk of unemployment because of the economic downturn.
The government have stated that they will pay young people’s wages, equivalent to 100% of the National Minimum Wage plus NI and automatic enrolment contributions for up to 6 months, effectively creating a grant of £6,500 per young person. The jobs must provide at least 25 hours per week and must attract at least the National Minimum Wage.
It remains to be seen whether the government will amend existing employment legislation to protect these individuals being dismissed after 6 months following the cessation of the government’s contribution.
There has been some criticism that no comparable scheme has been announced for older workers.
Incentives to encourage Apprenticeships
In an attempt to encourage the number of young people who are employed on apprenticeships, the Chancellor announced that employers will be given £2,000 for each apprentice that they hire (£1,500 for apprentices over the age of 25) from 1 August 2020 to 31 January 2021. These payments will be in addition to the existing £1,000 payment the Government already provide for new 16-18 year old apprentices.
The Chancellor also announced that employers would be given £1,000 for taking on trainees in response to the traineeship scheme being extended.
All of the measures announced above are aimed at all employers in the UK and are not sector specific. However, over and above these measures the Chancellor also announced a number of financial measures that he hopes will save jobs in the hospitality industry such as the reduction of VAT on food and drink and the “eat out to help out” scheme.
As above, as further details are released about these schemes we will provide further update but if you would like to discuss any of these latest developments and how they may affect or benefit your business then please contact a member of the Employment Team on 01274 864999.