The Covid trading restrictions are effecting a specific number of sectors. However, most businesses are best to trade without accepting the new offer from the Government.
If you are in the sectors most affected, consider whether continuing to limit trade with reduced employee hours is the best option. Great people are always worth retaining, but spreading the pain of reduced need to create jobs may not only be costly for the productivity of staff but unfair on the best performers.
What is the best way to remove a sticky plaster from hairy skin? The answer grab the end firmly and pull quickly. Shorten the pain and allow the recovery to begin.
Take a look at the cost of the painful option below.
New wage subsidy scheme will work.
Employees must work at least a third of their regular hours and be paid as usual for those hours. The Government and the employer will then top up wages for any hours not worked – equivalent to third each of the shortfall from the worker’s full-hours salary – and the employee will have suffered some loss in income.
For example, someone who usually worked 40 hours per week, but now works 14 hours at £10 per hour will get £140 for their work, £78 bonus from their employer and £78 from the Government. This means they are just £104 short of their usual salary for that week.
Similarly, if someone who usually worked 40 hours a week on £10 per hour is asked to work 20 hours, they would receive £200 for their work, £60 as a subsidy from their employer and £60 from the Government. This amounts to a total pay of £320. The scheme ensures they would lose only 20pc of their salary in this case.
So the more hours someone works, the smaller hit they have to take on their old income (as you might hope). The employer and Government also contribute a smaller share.