As part of its Plan for Jobs 2020, the UK Government announced in July 2020 that it would pay a bonus to employers that brought furloughed employees back to work and kept such employees continuously employed until 31 January 2021. Further guidance has now been published, in addition to a Treasury Direction, which states that the Job Retention Bonus is intended to “enhance and consolidate” the purpose of the Coronavirus Job Retention Scheme (CJRS), which is to preserve the jobs of furloughed employees.
The Job Retention Bonus is a £1,000 one-off taxable payment available to eligible UK employers for each employee that:
- the employer made eligible for claim under the CJRS;
- remains continuously employed from the end of the claim period of the last claim made under the CJRS through to 31 January 2021;
- is not serving a contractual or statutory notice period that started on or before 31 January 2021 (including a notice of retirement); and
- is paid a total of at least £1,560 (gross) between 6 November 2020 and 5 February 2021, in order to meet the minimum income threshold. There are some practical examples to help employers with this requirement.
The bonus can be claimed between 15 February 2021 and 31 March 2021, and employers are not obligated to pass this payment on to the employee; the payment is a reward to the employer.
Employers must be registered for Pay As You Earn (PAYE) and will also need to have reported, through the PAYE Real Time Information system, all payments made to each relevant employee between 6 November 2020 and 5 February 2021.
An employer may still claim the bonus even if it makes a claim for the same employee under the government’s new Job Support Scheme, which opens on 1 November 2020.
In addition, an employer will be eligible to claim the bonus in respect of employees of a previous business who have been transferred to it under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) or due to a change in ownership. The new employer will qualify for the bonus as long as the transferred employees were furloughed and the employer has made a successful claim for them under the CJRS as their new employer. The employees must also meet all the relevant eligibility criteria for the Job Retention Bonus, which means that the employer will not be able to claim the bonus for any employee who transfers to the employer after the CJRS ends on 31 October 2020.
The guidance makes clear that if an employer has repaid all of the CJRS grant received in respect of an employee (for example, because the grant was not needed to pay the employee’s wages), the employer will not be able to claim the bonus, regardless of the reason why the CJRS grant amount was repaid.