Employment Law Update – Details on the Job Retention Bonus

A new Treasury Direction was published on 1 October 2020, providing further details on the Coronavirus Job Retention Scheme (Job Retention) Bonus (the Job Retention Bonus).

The Job Retention Bonus

The Job Retention Bonus, which is described is an incentive to retain staff, is a one-off taxable bonus of £1,000 made available to employers in respect of “qualifying employees”. There is no obligation on the employer to pass this money on to their employees.

The Job Retention Bonus can only be claimed online between the six-week window of 15 February 2021 and 31 March 2021. The Treasury Direction does not specify how the claim is to be made, but further guidance is expected to be published in January 2021.

Qualifying employees

For employees to be considered a “qualifying employee”, they must have:

been furloughed at some point and had an eligible claim made for them under the Coronavirus Job Retention Scheme (CJRS);
been continuously employed (and not placed on notice) from the end of their last CJRS claim period until 31 January 2021;
been paid the minimum income threshold (further details of which are below); and
been paid at least one payment of taxable earnings in each of those tax months.

A “qualifying employee” does not need to be an employee; they can be an agency worker or officeholder so long as all other criteria set out above are met.

To meet the minimum income threshold, employees must have been paid a gross amount of at least £1,560 between 6 November 2020 to 5 February 2021.

The employee will also need to have earned some taxable pay (of any amount) in each of the relevant tax months in this period, which are as follows:

6 November to 5 December 2020;
6 December 2020 to 5 January 2021; and
6 January to 5 February 2021.

Employers should be aware that a period of statutory or unpaid leave may reduce an employee’s taxable pay below the minimum income threshold.

HMRC have published guidance and worked examples on how the minimum income threshold will work in practice, which can be found here.

Eligible employers

For an employer to be eligible for the Job Retention Bonus, at the time of claiming, they must:

be enrolled for PAYE online;
have complied with all requests from HMRC in respect of providing employee data for CJRS claims;
have made a claim under the CJRS in respect of each “qualifying employee”;
have kept their payroll up to date and reported the leaving date of any employees who have left their employment; and
have delivered to HMRC all real time information reporting for all employees between 6 April 2020 and 5 February 2021.