Chancellor Rishi Sunak has announced a £30bn plan to boost the economy and prevent mass unemployment as the financial effects of the coronavirus wear on. We have summarised the key points below which will be of interest to employers:
Job retention scheme
The furlough scheme is due to be phased out over the summer before coming to a complete close at the end of October. There will be no changes made to the scheme, but the government does plan to introduce a bonus for employers who retain staff after bringing them back from furlough.
The government will pay £1,000 to employers for every staff member (paid over £520 p.m.) who is retained until at least January 2021 as a means of trying to reduce mass redundancies at the end of the furlough scheme.
Questions that have already arisen are – Is this enough money to make a difference? and secondly is it simply open to exploitation? Only time will tell.
“Kickstart scheme” and traineeships
There are fears that young people will be at the highest risk of long-term unemployment. To address this, the government intends to introduce a new “Kickstart scheme” which will fund the direct creation of high quality jobs for young workers. It is hoped that the scheme will help to create thousands of high quality 6-month work placements aimed at individuals aged 16-24 who are currently on Universal Credit. The government will provide funding for each job under the placement which will cover up to 100% of the National Minimum Wage for up to 25 hours per week, as well as the associated National Insurance a minimum pension contributions.
Further plans by the government to get young people into work include funding for employers who provide traineeships at a rate of £1,000 per trainee. Traineeships provide classroom-based lessons in maths, English and CV writing as well as up to 90 hours of unpaid work experience.
There are also plans to introduce a new payment to employers who hire apprentices. At present, employers receive a £1,000 payment for each apprentice aged between 16-18 years old. In addition to this, employers will be eligible to receive an additional £2,000 for each new apprentice they hire between 1 August 2020 and 31 January 2021.
With younger talent now on the market this could have the benefit of bridging resource gaps and investment in future talent for their businesses to help recover and rebuild after coronavirus.
The details are still to be confirmed. We will share more information as it becomes available.
Our solicitors are on hand to advise you with your employment law needs. Whether that be assistance in navigating the flexible furlough scheme, considering potential redundancies or even preparing employment contracts for new starters. Please do get in touch if we can be of assistance.