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Chancellor Rishi rewards employers with bring back bonus

The Chancellor of the Exchequer has announced a £9bn bonus scheme which would see a £1,000 bonus paid to companies for each employee brought back from furlough.

Previously furloughed employees would need to continuously remain in work until at least January to qualify, he said, and be paid at least £520 on average in each month from November to the beginning of next year.

" We will pay the bonus for all furloughed employees, so if employers bring back all nine million employees who have been furloughed this would be a £9bn policy to retain people in work,” said Mr Sunak. " Our message to businesses is clear, if you stand by your workers, we will stand by you."

The Coronavirus Job Retention Scheme is due to end in October an employers are expected to contribute towards paying furloughed employees from August.

"If every furloughed employee was brought back to work, this would amount to a £9 billion retention policy,” said Joanne Frew, National Head of Employment at law firm DWF. “With a primary focus on protecting jobs, the Chancellor set out his plans to help re-open the economy with further measures such as the discount vouchers to eat out in August, reducing VAT in the hospitality and tourism sectors from 20% to 5% until 12 January 2020 and reducing stamp duty on transactions below £500,000 until 31 March 2021.”

Simon Winfield, Managing Director of Hays UK and Ireland, said: “Whilst the furlough bonus is welcome, we remain disappointed that the furlough scheme continues to overlook the specific needs of temporary workers. The flexibility they offer will be more key than ever before, but they don’t appear to have been considered. It would also have been good to see changes to the furlough scheme to apply it on a sector by sector basis.”

FCSA Chief Executive, Julia Kermode, responded to the announcement, saying: “The job retention bonus for employers who bring back workers from furlough will be a real incentive for businesses who employ people directly and will offer some much-needed financial support during this difficult time. However, for umbrella employers and agencies who operate a very different employment model, the £1,000 per employee bonus falls significantly short of the total financial cost for an umbrella employer or recruitment agency to continue to furlough their employees until the CJRS scheme ends on 1 October 2020.

“There will be many umbrella employers or agencies, even with this cash bonus, who simply cannot afford to continue to furlough without putting their business at financial risk. This is once again an example of the government’s failure to take into consideration this vital employment model and, as a consequence, potential putting thousands of contractor jobs at risk in a sector that has already suffered enough in recent months.”

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