We must offer support to all workers, says Rebecca McDonald. Here’s how.
The outbreak of Coronavirus, Covid-19 means our working lives are suddenly looking very different. Millions of people across the country are working fewer hours or have had to stop working completely. Some have seen their employers close temporarily; others are now looking after their children or staying at home because of health risks or other caring responsibilities. Families across the country are swept up in worry, wondering how they will manage financially as well as how to keep themselves safe.
The Government response so far has been just and compassionate. Those who were at risk of losing their jobs will be very reassured by the Job Retention Scheme that should protect many roles by reimbursing companies 80% of wages (up to £2,500 a month) so they can keep workers on who would otherwise have been laid off. But many workers are still waiting for the lifeline they need.
A package of support for self-employed people on a par with the Coronavirus Job Retention Scheme
Self-employed people have less access to sick pay than employees and haven’t yet been offered a similar level of protection as the Job Retention Scheme. This must be rectified urgently to anchor the millions of self-employed people who are currently caught up in waves of uncertainty and anxiety. We understand that it will be less straightforward than administering the employee job retention scheme, therefore we recommend:
- prioritising a measure that is blunt, approximate but quick to deliver over one that is precise but comes too late. The Government should look to examples like Norway’s immediate cash payment to self-employed people who have lost work, with payments based on 80% of the average wage over three years
- removing the National Insurance contribution criteria for eligibility to ‘New Style’ (contributory) Employment and Support Allowance for people sick or required to self-isolate. This would allow self-employed people to access this sickness benefit even where they may not have made the required national insurance contributions.
Government has proven it can be swift and compassionate with the Coronavirus Job Retention Scheme. It is only right that it now extends this support to entrepreneurs. We all need security right now – regardless of whether we work for a company or for ourselves.
The Job Retention Scheme must be extended to cover those looking after children or at home because of health risks
The Job Retention Scheme offers protection for workers whose employer loses business and finds it difficult to pay their wages due to the public health measures needed to reduce the spread of COVID-19. But it does not currently help people who need to reduce or suspend working for other reasons.
Most low-paid workers are not able to work from home (Resolution Foundation, 2020) and so are caught in an impossible situation of facing either a severe loss of income or going against the public health advice aimed at protecting themselves and others.
The Government must:
- Extend the Coronavirus Job Retention Scheme to cover employees who have their hours reduced or are forced to take a leave of absence due to nursery and school closures or Government advice to shield or practise stricter social distancing due to age, vulnerabilities or health conditions
- clarify how the existing Coronavirus Job Retention Scheme applies to workers with variable hours, including how 80% of their average wage will be calculated
- start the Coronavirus Job Retention Scheme as quickly as possible. Speed will be incredibly important in protecting people from losing work and supporting employers to maintain their workforce.
The Government has already shown it is willing to do the right thing to protect businesses and employees during the coronavirus outbreak. Now is the time to do ‘whatever it takes’, to show further compassion and offer security to everyone in our society faced with the prospect of hardship.
- Read our briefing for more recommendations and analysis.