News Update

‘Job Retention Bonus’ and ‘Kickstart Scheme’

Chancellor Rishi Sunak has announced his plan today to rescue the economy in the aftermath of coronavirus.  In his plan, two key employment announcements were made, aimed at job retention and job creation:

Job Retention Bonus

  • The government will pay £1,000 per employee who is brought back to work from furlough leave.  The Job Retention Scheme will end in October.
  • Chancellor: “If you’re an employer and you bring back someone who was furloughed – and continuously employ them through to January – we’ll pay you a £1,000 bonus per employee.”
  • To qualify, the returning employee must be paid an average of £520 each month between 1st November 2020 and the end of January 2021.

This is a big announcement, but lacks the detail of precisely how it will operate in practice, raising more questions than it answers.  It is reminiscent of the first CJRS announcement of furlough on 19th March, following which employers were disparately seeking guidance.  We will let you know as soon as the Government publishes it.

Kickstart Scheme

  • The Kickstart Scheme will directly pay employers to create new jobs for any 16 to 24-year-old at risk of long-term unemployment.
  • For each “kickstarter” job, the government will subsidise six-month work placements for people aged 16-24, who are on Universal Credit.
  • Specifically, the Government would cover the cost of 25 hours’ work a week at the National Minimum Wage – £4.55 for under 18s, £6.45 for 18 to 20-year-olds, and £8.20 for 21 to 24-year-olds.
  • The scheme will open for applications in August (with the first jobs expected to start in the Autumn), and run until December 2021 – with the option of being extended.

As with the Job Retention Bonus, the devil will be in the detail and the Government have indicated that conditions would need to be met for the subsidy to be paid.  We therefore suggest that employers watch this space for the all-important government Guidance on the scheme, once published.

If you require advice/support on any aspect of the above or on any other employment matter in the meantime, please do not hesitate to contact Jonathan Bruck.

This article is provided for general informational purposes only.  Although every effort has been made to ensure that information in this article is accurate, it does not constitute legal advice and should not be relied on as such.  In case you require any legal advice, please do not hesitate to contact us.

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Jonathan Bruck
Head of Employment
+44 20 7539 7305
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