UK Announces COVID-19 Employment Protection for Employees Unable to Work

March 20, 2020

In one of a series of measures announced 20 March 2020, the UK government said it will provide unprecedented financial support in respect of employees who are unable to work by reason of the current COVID-19 crisis. The intervention is intended to preserve jobs.

The government announced it will pay 80 percent of such employees’ wages up to a cap of £2,500 per month. Payments will be backdated to March, but it is being reported that the payments will not be available until the end of April. The plan appears to be a system of grants to be made available to employers and administered through Her Majesty’s Revenue & Customs.

It is not yet clear whether these payments will be subject to tax and National Insurance contributions, what criteria or evidence will be required for such payments to be made, how employers (or, less likely, employees) must claim such payments, how they will be administered or how long it will take for such payments to be made.

Therefore, further details are awaited, but it is being reported that this support will be available for employees who were laid off prior to the announcement, provided that they are re-employed and placed on “leave of absence,” which one may assume refers to unpaid leave.

More information will follow.

McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial COVID-19-related business and legal issues.

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