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COVID-19: UK Chancellor's Plan for Jobs

08/07/2020

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United Kingdom

UK Chancellor Rishi Sunak today announced new financial support measures designed to support employers and employees following the end of the Coronavirus Job Retention Scheme ("CJRS"), the mechanism through which the UK Government covers up to 80% of the wage costs of furloughed employees, on 31 October 2020.

Jobs Retention Bonus

"While we can't protect every job, one of the most important things we can do to prevent unemployment is to get as many people as possible, from furlough, back to their jobs".

The Government will pay a bonus to employers who bring previously furloughed employees back to work at a rate of £1,000 per employee retained.

To be eligible for the bonus, employers must:

  1. continuously employee the previously furloughed employee until at least 31 January 2020; and
  2. pay the employee at least £520 on average per month between November and 31 January 2020  (which is equivalent of the National Insurance lower earnings limit).

The Government's Policy Paper on the UK Chancellors' Plan for Jobs states that the Jobs Retention Bonus will cost up to £9.4 billion. The bonus will potentially therefore be accessible to all employees that have been furloughed at any time (the latest government statistics, show that, as of 5 July 2020, 9.4 million people in total have been furloughed across the lifespan of the CJRS and it is now closed to new entrants).

Kickstart Scheme

"Under 25s are two and half times as likely to work in a sector that has been closed. We cannot lose this generation"

The Government will fund 6-month work placements for young people (aged between 16 and 24) who are on Universal Credit and are at risk of long-term unemployment.

Under the Scheme, the Government will cover the wage costs of eligible young employees up to 25 hours' per week at the applicable National Minimum Wage rate:

  • Under 18 - £4.55 per hour 
  • 18 to 20-year-olds – £6.45 per hour
  • 21 to 24-year-olds - £8.20 per hour

It will be open to employers to top up the wages of individuals employer under the Scheme if they choose.

To be eligible for the Scheme, employers will be required to demonstrate that the jobs are 'new' and funding will be conditional upon the employer showing that the job applied for is additional.

The Scheme is proposed to commence in August 2020 and to continue until December 2021, with the potential for extension. It is expected that the first jobs under the Scheme will start in the Autumn of 2020.

The Government's Policy Paper on the UK Chancellors' Plan for Jobs states that the Kickstart Scheme will cost £2.1 billion, however, the UK Chancellor has confirmed that there is no cap on the number of jobs that can be supported under the Scheme.

How we can help

We are working with many businesses, across various sectors impacted by the UK Government's recent measures, who are looking closely at whether they can take advantage of the financial support available as part of a series of actions to protect their businesses. 

Please do call or email any member of the Fieldfisher employment team for more information on the CJRS and for advice on how your business can best take advantage of it.

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