Here to Help: Exploring the Government Wage Rescue Package
In a bid to combat mass redundancies across the country, the government has announced that it will pay 80% of salaries up to £2,500 for staff who are kept on by their employer.
COVID-19 has resulted in a huge amount of economic uncertainty and the government has faced enormous pressure to support businesses.
The latest announcement aims to prevent mass unemployment as preventative measures have resulted in businesses facing major hits to their bottom line.
Chancellor Rishi Sunak stated that these “unprecedented” measures are in place to stop workers being laid off during the crisis.
It’s understood that the wage relief will also be provided to businesses that have already laid off staff due to COVID-19, providing the staff are brought back into the business and instead given a leave of absence.
Sunak said that this plan will allow workers to keep their jobs during these uncertain times, even if employers can’t afford to pay them.
“People are worried about losing their jobs, about not being able to pay the rent or mortgage, about not having enough set by for food and bills. To all those at home right now, anxious about the days ahead, I say this, you will not face this alone,” Sunak added.
Faisal Islam, Economics Editor for the BBC also analysed the recent development, stating “In theory, it should save hundreds of thousands of jobs. Perhaps more. Employers have to accept that the government is doing something they would have never imagined a UK government to do.”
The package in detail and how to access it
Under the new scheme, anyone who cannot work due to the current crisis will be paid 80% of their salary by the Government, capped at £2,500 each month.
In practice, the initiative will entail an HMRC grant and will be backdated to the 1st March 2020. It will be open for the next three months.
To access the funding, employers will have to officially declare their employees “furloughed workers” and notify them of the change in accordance with existing employment law and with the workers’ employment contracts.
Once this is done, they will have to submit information to HMRC about the employees that have been furloughed through a new online portal.
We’re working with HMRC to understand the changes and how they will impact payroll professionals.
In the meantime, here’s an informative one-page document on how we can help you maintain your payroll during these uncertain times.