Job Retention Bonus Scheme

The chancellor has said there will be no extension to the furlough scheme that has been in place since March 2020. He has confirmed that there will be further financial support for businesses in the form of a bonus for employers who can bring employees back to work.

Employers will be paid a job retention bonus of £1,000 for each employee they bring back to work from furlough leave between November 2020 and January 2021.

To qualify for the job retention bonus, an employee would need to be employed with the company at the end of January 2021 and earn at least the lower earnings limit for National Insurance of £520 per month during this period.

Job retention bonuses will be paid in February 2021. The chancellor said if employers stand by their workers then the government will stand by those employers.

The government are looking for ways to recover from the pandemic and now wish to support jobs through skills development and protecting jobs through incentives, for consumers to support tourism and hospitality businesses.

The bonus is the same amount for each employee regardless of what employee’s actual wages are, but is targeted at employers with lower-paid workers, as this is put towards the wages of an employee on the lower earnings limit of £520 per month, the bonus covers nearly two-thirds of wage costs.

How does this announcement affect ongoing redundancy programmes?

Employers in consultation over redundancies should be prepared to discuss if this bonus could help to avoid or delay proposed redundancies.

If the bonus is not enough to avoid redundancies, it could be used in combination with temporary pay or a reduction in hours.

Will the bonus be paid to employers who have already brought employees back from furlough?

It has not yet been confirmed if the bonus will be paid to employers who have already brought employees back to work or those who had only furloughed employees on a short time.

What about employees who cannot return to work?

Some employees will be unable to return to work when the furlough scheme ends due to various reasons including clinical vulnerability, concerns about travel, childcare disruption etc. Employers will need to consider options for these employees, but currently, it is likely that this bonus would not be payable for these employees.

Further details on this will be released later in July.

If you would like further information, please contact Clover HR on 0121 516 0299 or email us at info@cloverhr.co.uk


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