Labour has urged ministers to go "further and faster" to help those affected by the coronavirus pandemic.
Unions have welcomed the government's emergency financial support package for workers, announced earlier by the chancellor.
And business group UK Hospitality said the move could potentially save up to a million jobs.
But shadow chancellor John McDonnell said cash must be available now and not subject to "weeks of delays".
Labour had been calling for the government to intervene to pay the wages of those unable to work due to school closures and other disruptions and those at most risk of redundancy - to a level of up to 90% of monthly earnings.
Chancellor Rishi Sunak said the government would subsidise the monthly salaries of employees unable to work as part of an "unprecedented" package of measures to help protect people's jobs.
Speaking at a press conference in Downing Street, in which he also announced increases to certain benefits, he said he understood the fear of not being able to pay bills and promised workers "you will not face this alone".
Leading trade unions, who were consulted about the plans in advance, said they represented a huge step forward in stopping millions of low-paid workers falling into hardship.
"Securing jobs through government underwriting of wages is hugely welcome, and that’s what we've been calling for action on," said the GMB's general secretary Tim Roache.
“This gives businesses and workers enhanced security and will help us recover in the long term."
He called on employers to pay the remaining 20% to ensure people were not left any worse off.
The GMB union said the plan to pay 80% of wages for employees not working, up to £2,500 a month, was "hugely welcome".
'Stay at home'
The government's announcement was welcomed by leading Labour figures, such as Greater Manchester Mayor Andy Burnham and former leader Ed Miliband.
London mayor Sadiq Khan has said he was "concerned about the ability of the NHS to cope" if the number of coronavirus cases increases as expected.
Referring to the "huge increase" in the number of people in the capital city contracting the virus, he urged Londoners to "please stay at home" or risk their own health and the lives of the vulnerable.
Asked about the the prime minister's call for many meeting places to shut their doors, he said, "It's right that pubs, that rests, that cafes... are closed down."
He said that only key workers should be using public transport and urged others to work from home.
Mr McDonnell warned the government's plans still represented "quite a significant wage cut" and said further action was needed to boost statutory sick pay and to make it easier for the self-employed to claim via universal credit.
"The chancellor has shifted under the pressure we put on him but...he needs to go further and faster".
Ed Davey, the acting leader of the Lib Dems, welcomed the government's intervention but said "far too little is being done for the self-employed, those on zero hours contracts or those on statutory sick pay and benefits".