Coronavirus: Government urged to protect jobs and livelihoods with wage subsidies

Coronavirus: Government urged to protect jobs | HR Solutions

As the government unveils its emergency package of measures to support struggling businesses during the COVID-19 outbreak, the Labour party and Trade Union Congress (TUC) are calling on the state to do more to protect at-risk workers.

The outbreak of coronavirus has already infected more than 10,000 people in the UK. Its rapid spread, fear of the virus and government advice to stay at home has left businesses and individuals across the UK counting the cost. Retailer Laura Ashley recently announced it was filing for administration as a growing number of businesses have been forced to close their doors.

Meanwhile, the recent announcement of country-wide school closures (except for vulnerable pupils or children of key workers) will hit working parents hard as they try to juggle childcare with keeping their jobs. MPs from all parties are urging the government to support employers amid the pandemic and take quick action to protect incomes and jobs.

TUC report

A report by the TUC outlines proposals which extend the Chancellors announcements to ensuring jobs are protected and guaranteeing all families an income. The union believes that these measures will help to slow down the spread of infection and help the economy to bounce back sooner.

The TUC wants the Chancellor to increase protections for workers and follow the examples of other countries who are using government subsidies to prevent job losses and maintain economic activity. The report outlines five key actions:

  1. Wage subsidies for reduced hours.
    Governments to subsidise wages for shortened hours, similar to Germany, Denmark and Sweden.
  2. Sick pay for everyone
    Sick pay to be made available to everyone, including low paid workers who don’t earn enough to qualify for it. Sick pay should also be increased to at least the real living wage.
  3. Parental leave support
    Improve parental leave and financial support for working families whose children are unable to attend school or nursery.
  4. Take measures to boost the economy
    The government should help people pay their rent and mortgage and cover debt repayments. Increase the earnings of those living on benefits and pensions.
  5. Create a taskforce
    Assemble a national taskforce of employers, unions and government agencies to protect the UK from a recession and mass unemployment.

Labour’s proposals

While the government has announced a multi-billion pound package to support businesses, the Labour Party believe they should go further. Labour wants the government to pay up to 80% of the monthly wages of people most at risk of losing their jobs due to the pandemic. It believes wage subsidies and direct payments to people temporarily out of work or struggling firms, will help to mitigate the economic impact. This includes underwriting the wages of employees most at risk of losing their jobs. Middle earners in at-risk businesses should receive 85% of their monthly salary from the state and higher earners should receive 80%, with the remainder topped up by their employer.

Under Labour’s plan, anyone working for a company which faces having to lay off at least 30 staff, or one in five of their workforce, would be eligible. Employed and self-employed workers who can show that their revenue will be down 30% on the same month last year should also qualify. Also covered would be people who find themselves out of work temporarily, such as carers for dependents with special needs, people on unpaid leave and teachers.

Coronavirus Advice and Guidance for Employers

For more articles and ongoing updates visit the HR Solutions’ dedicated page, ‘Coronavirus Advice and Guidance for Employers’.

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