Work places have been told to prepare for the worst cast scenario of up to 25% of staff off work as coronavirus continues to sweep across the country, the Cabinet Office said.
Boris Johnson has asked ministers to develop "robust contingency plans" for the absences, as the government acknowledged the high Covid levels could hit businesses hard.
It comes amid reports that work-from-home guidance in England could be set to roll on for most of January.
Steve Barclay, the Chancellor of the Duchy of Lancaster, is chairing “regular meetings” with ministers to assess how the highly transmissible Omicron variant is affecting workforces and supply chains.
He is also keeping close tabs on the situation in schools ahead of pupils returning for the new term.
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The department said Mr Johnson has charged ministers with working with their respective sectors to test preparations and contingency plans to limit disruption from mounting Covid infections.
It acknowledged that, despite the accelerated booster programme, high Covid levels and the increased transmissibility of the Omicron variant could mean businesses and public services face further disruption in the weeks to come.
The Cabinet Office claimed that, so far, disruption caused by Omicron has been controlled in “most parts of the public sector”.
But it said public sector leaders have been asked to test plans against “worst case scenarios” of 10%, 20% and 25% workforce absence rates.
Health minister Ed Argar has said the government is “doing the responsible and sensible thing” by drawing up contingency plans.
Asked on Times Radio about the advice, he said: “What you’re talking about there is Government doing the responsible and sensible thing of preparing for a range of contingencies, making sure that it considers all possible eventualities, even those that are at the very high end of the scale.”
On whether he thought such absence levels were likely to eventuate, Mr Argar said: “I think we model a range of scenarios up to things we think are highly unlikely, but you still do it because that’s what a responsible Government does in preparing for all eventualities.”
In December, the education secretary called on ex-teachers to help with Covid-related staff shortages in the new year.
The plea came amid reports that some schools were experiencing very low attendance among teachers and pupils ahead of the Christmas break.
Labour claimed the Prime Minister had previously gone missing “for days on end” when he should have been instructing ministers to draft contingency plans.
Deputy leader Angela Rayner said: “Boris Johnson’s lack of leadership means his government has dithered and delayed, leaving contingency planning to the very last moment.
“Boris Johnson should have instructed his ministers to start planning weeks ago, but instead he went missing for days on end.
“With record Covid infection numbers, the Prime Minister must immediately get a grip on workforce pressures, keep essential services moving, keep schools open and keep people safe.”
The most recent restrictions, set out in the Government’s Plan B for England, are set to expire six weeks after implementation, with a review after three weeks, which is expected on or close to Tuesday January 4.
A further 162,572 Covid cases have been recorded in England as of 9am on Saturday, a new record for daily reported cases in the country.
The government said a further 154 people have died in England within 28 days of testing positive for Covid-19.
While daily case and death numbers are not available for Scotland, Norther Ireland and Wales on Saturday, Friday capped the fourth day in a row of record daily rises with 189,846.