The parliament approved measures worth about €3 billion, or 6% of GDP, to help companies and individuals overcome the coronavirus epidemic. Under the new measures, the state will pay compensation and obligatory taxation for the national pension and health systems for businessmen and farmers hit by the virus, as well as to those who are temporarily laid off.
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[close]Redundancies and temporary lay-offs due to the coronavirus pandemic are rising. Some 9,000 employees were made redundant between 16 March and 1 April, and the number of temporary layoffs was 58,000. A total of 3,670 companies have called for co-operation in negotiating further temporary layoffs or redundancies, as the law requires.
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[close]The government has presented its first economy aid plan how to help employers, the self-employed and companies to cope with the impact of the pandemic. The state will pay 80% of the employee’s salary in companies that have had to close due to the COVID-19 virus. The state will contribute €180 per employee for companies whose revenues dropped by more than 2%, up to €540 per employee for companies with a more than 80% drop in revenues.
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[close]Employer’s organisations and trade unions protested against what they called an attack by the authorities on the independence of the country’s Social Dialogue Council and the autonomy of social partner organisations, under the disguise of measures to combat COVID-19. According to eight employers’ and trade union organisations, new legislation adopted by the parliament contains a provision authorising the prime minister to dismiss members of the Social Dialogue Council during the period of the state of epidemiological emergency.
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[close]The government plans to offer about €5 billion in loans and subsidies to businesses to help them cope with the economic impact of the coronavirus. The state will also make a one-off payment of €100 to every citizen older than 18, or around five million people. The state would use €700 million to pay minimum wages of 30,367 dinars (€258) and allow tax delays for micro and small enterprises.
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[close]The Labour and Pensions Minister announced that 43,000 employers sought assistance as part of the government’s first set of measures to alleviate the impact of the coronavirus pandemic on the economy, asking the state to pay the minimum wage for 253,000 employees.
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[close]Companies that are forced to close due to the state of national emergency will be able to access the simplified “lay-off” procedure. Companies that have been closed by administrative or legislative decision have access to the extraordinary employment support mechanism. According to the Minister of State, Economy and Digital Transition, the ordinance recently published that created the measure should be reviewed in order to simplify and clarify it. He added that it implies the suspension of the contract or the reduction of working hours. A general lay-off regime is already provided for in the Labour Code.
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[close]The Ministry of Development announced a special bill introducing a protection package for enterprises due to the increased incidence of COVID-19. The new regulation should support businesses and minimise the effects of the epidemic by, among other things, introducing debt relief and postponement of the payment of taxes and social security contributions, protecting employees and supporting the labour market, including measures to support companies forced to suspend their business operations. In the case of short-time work, employees will be entitled to benefits from the Guaranteed Employee Benefits Fund of up to 100% of the unemployment benefit.
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[close]The government announced the Short-time Working Allowance Amendment which will make it more easy for employers to obtain a short-time allowance after they have implemented short-time work. The arrangements entered into force retroactively on 1 March. Once short-time working measures apply to 10% of the workforce (rather than the previous figure of 30%), companies can apply to the authorities for financial assistance, after consulting their works council. Employees working short-time receive compensation from the Federal Employment Agency.
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[close]A total of 164 employees were laid off at the Blue Lagoon resort. The resort has been closed due to a ban on public gatherings of more than 20 people. After the layoffs, 600 employees remain, some of whom will work short-time in the coming months.
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Government announces National Covid-19 Income Support SchemeMarch 24, 2020
The new income support scheme includes a temporary wage subsidy to companies of 70% of the net wage up to a maximum weekly tax-free amount of €410 per week (€38,000 net per year) and up to €350 for an annual net wage between €38,000 and €76,000. Employees are expected to receive 100% of their normal wages for the time of the wage subsidy: 70% are covered by the state and 30% by the employer.
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