British companies to pay 20-30% of furloughed employees' wages

in what may come as a major relief to businesses, the Indian government has withdrawn its order directing employers to pay wages to workers, even with units remaining shut during lockdown. The Ministry of Home Affairs (MHA) had issued a fresh set of guidelines repealing the order dated March 29, 2020 which had talked about compulsory wage payment to workers during lockdown.

 

The United Kingdom has drawn up plans to require employers to cover 20% to 30% of furloughed employees' wages from August to reduce the vast burden of the coronavirus crisis on government finances, The Times newspaper reported.

 

The United Kingdom extended its job retention scheme - the centrepiece of its attempts to cushion the coronavirus hit to the economy - by four months on May 12, but told employers they would have to help to meet its cost from August.


"The Treasury has drawn up plans that would require employers to cover between 20 and 30 per cent of people's wages," The Times said. "They would also be required to cover the cost of employer's national insurance contributions, on average 5 per cent of wages."

 

A spokesman for finance minister Rishi Sunak declined to comment on the report. Sunak is expected to announce the changes next week, The Times said.

 

Sunak said on Friday that Britain was facing a "very serious economic crisis" and jobs would be lost in the "days, weeks and months to come".

 

Meanwhile,in what may come as a major relief to businesses, the Indian government has withdrawn its order directing employers to pay wages to workers, even with units remaining shut during lockdown.

 

The Ministry of Home Affairs (MHA) had issued a fresh set of guidelines repealing the order dated March 29, 2020 which had talked about compulsory wage payment to workers during lockdown.

 

Earlier a three-judge Supreme Court Bench led by Justice L. Nageswara Rao indicated that payment of full wages, as directed by the Ministry of Home Affairs (MHA) in an order on March 29, may not be viable for small and private enterprises, which themselves are tottering on the brink of insolvency due to the lockdown. Some small units may not have been able to survive a fortnight into the lockdown. The court remarked that the March 29 order was an omnibus one and there were several issues involved that required careful reconsideration from the government side.

 

The court hearing was based on a batch of petitions filed by several companies challenging the constitutional validity of the March 29 order, which mandates that industry, shops and commercial establishments, without exception, should pay their workers without any deductions in the name of COVID-19 pandemic.


 


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