Most of the wages of employees who are not working and otherwise would have lost their jobs, are being covered by the government.
The Chancellor Rishi Sunak said the “unprecedented” package of measures would see companies receive grants to pay their workers 80% of their salaries – up to a limit of £2,500 a month.
Employers have been urged not to cut jobs. Benefits payments are also to be increased.
The intervention comes after people were told to work from home if they can, as part of stringent measures to combat the spread of coronavirus.
With schools shutting, parents are having to work more flexibly, and self-isolation puts more pressure on businesses who have staff coming in.
Sick pay rules have been amended, and the self-employed will see their tax liabilities delayed.
Who will pay my wages?
If you are still employed but do not currently have work, the plan is that you will still get your wages.
Your employer will be able to access grants, by the end of April, from the UK’s tax authority to allow them to keep paying you.
The typical worker is paid £585 a week, on a median average (which is the middle point of all workers), according to the Office for National Statistics (ONS). That is about £2,340 a month.
The government says 80% of gross wages in the private sector, up to £2,500 a month, for those not working and who would otherwise have been laid off will be covered by these grants from HM Revenue and Customs (HMRC).
These will be backdated to March and the scheme will last three months at least. The idea is to prevent mass unemployment.
How does this system compare with other countries?
The Danish government has said it will cover 75% of private companies’ wages if they promise not to cut jobs.
The Australian government is helping smaller companies with an annual turnover of less than A$50 million (£25m) with sums equivalent to half the tax they pay on employees’ salaries.
Sweden and Canada are also offering to subsidise some employees’ wages, while other countries like France and Italy are expanding their welfare systems to support workers in that way.
Does the wages plan cover everyone?
No, this is for those who are on the pay-as-you-earn system.
Self-employed people will not benefit from these grants, instead the protection for them will come through a more generous benefits system. They will also be able to pay tax later.
Those on working-age benefits will see a more generous Universal Credit system, rising by about £20 a week for the next year. The same rise will be given to those still on the working tax credit system. The government says this will benefit more than four million of the lowest-income households.
Public sector workers are not covered because most of them have their wages paid directly by the government.
What if I’m working from home?
Everyone who can work from home should do so. Working hours can still be clearly defined, and staff should receive their normal pay.
However, this puts various new responsibilities on an employer – for example, they are responsible for equipment they supply, and must say what it should be used for.
The question of who covers the running costs should ideally be outlined as soon as possible, as should how any extra expenses should be covered.
An employer has a duty of care for staff, even if they are working at home.
The requirements of the health and safety legislation apply to homeworkers too, according to the employment conciliation service Acas, which has set out guidance for employers and employees.
Will I get paid if I need to look after my children?
When your children’s school is closed, or if you have a relative who is ill, your employer must give you time off to look after them.
But your employer is not forced to pay you unless your contract requires it.
However, many employers are allowing parents to work flexibly, to try to manage both work and childcare.
Key workers, who have been defined by the government, can still send children to school or nursery.
Will I get paid if I have to self-isolate?
You may do through sick pay which varies from company to company.
Many employees will have contracts that allow them their normal pay while they are unable to work because they are sick.
Even where people do not get their fully paid sick leave, or if they work in jobs where they do not have contractual sick leave, there may be minimum payments they can rely on, known as statutory sick pay.
What is statutory sick pay?
Statutory sick pay (SSP) is money paid by employers, so self-employed workers are not eligible, but casual or agency workers are.
Chancellor Rishi Sunak said that SSP would be paid to people who need to be off as they or their family have symptoms. People should be able to obtain a sick note from the NHS 111 service rather than getting one from a GP.
The rules were also changed so that those people would be eligible for SSP on their first day away from work, instead of having to wait until the fourth day as used to be the case.
He also announced that businesses with fewer than 250 employees would be able to claim back from the government two weeks of SSP paid to staff affected by coronavirus.
How much is statutory sick pay?
It is set at £94.25 a week, although of course employers could pay more if they want to.
To get SSP people need to be earning at least £118 a week. Many people such as those on zero-hours contracts – who work variable hours every week – may earn less than this. The Trades Union Congress (TUC) has calculated that there are two million workers who are not eligible for SSP.
We asked the Office for National Statistics to check this figure and they estimated that there were 1,766,000 jobs done by adults in the UK that paid less than £118 a week.
The number of people involved is likely to be somewhat lower than this because one person could have more than one of these jobs. And indeed, if somebody has more than one of these jobs it could take them above the £118 a week needed to qualify.
About 70% of these jobs are done by women.
What is the support for self-employed people?
Broadly speaking, employees are entitled to sick pay and self-employed people are not.
In the latest UK figures for the last three months of 2019, there were about 28 million employed people and about five million self-employed.
Meanwhile, the government has said it will make it “quicker and easier” for self-employed people seeing a sudden drop in income to access benefits.
The chancellor said that those on contributory employment and support Allowance (ESA) will be able to claim from day one, instead of day eight.
He has removed the minimum income floor. The minimum income floor would have taken into account how much they would normally expect to earn in a month when calculating their entitlement to universal credit.
Not having the floor means they will be able to claim for time they spend off work due to sickness.
It means self-employed people can now access, in full, universal credit at a rate equivalent to SSP for employees.
Mr Sunak said they would not need to attend a job centre and could apply on the phone or online instead.
The government has also announced a new £500m fund to support economically vulnerable people, which will be allocated by local authorities.
Update: This piece was first published on 6 March and has been updated to reflect changes announced since.