Unemployment Fund board in favor of continuing wage support in June

An Estonian Unemployment Insurance Fund (Töötukassa) office on Vaksali Street in Tartu.
An Estonian Unemployment Insurance Fund (Töötukassa) office on Vaksali Street in Tartu. Source: Aili Vahtla/ERR

The supervisory board of the Estonian Unemployment Insurance Fund, which convened on Wednesday, decided to support continuing with the current wage compensation measure in June and also proposed to make the current criteria slightly stricter.

According to a proposal of the supervisory board, the condition that the turnover or revenue of the company must have decreased by at least 50 percent compared to June of the previous year will become mandatory, the Unemployment Insurance Fund said.

Additionally, an employer must meet one out of two following conditions - the company is in a situation where it does not have work to give in the agreed amount to at least 50 percent of employees or the wages of at least 50 percent of the company's workers have been lowered at least 30 percent or to the minimum wage.

In June, the Unemployment Insurance Fund will compensate to the employee 50 percent of their previous average wage, but no more than €800 a month gross, and no less than the minimum wage. The employer is obliged to pay the employees receiving the compensation a gross pay of at least €150 a month, which must be paid out before the application is filed.

The period during which an employer cannot make an employee redundant will also increase. Instead of the current one month, the employer must guarantee a job for at least the next two months. Otherwise, the employer must return the full amount of the benefit to the Unemployment Insurance Fund.

The supervisory board also proposed that companies that do not have tax arrears or that have deferred their tax arrears will be able to apply for compensation for their employees for their June salary. Compensation for the June salary can only be claimed for people working under an employment contract whose employment contract has been concluded before March 1, 2020.

In June, those who have received benefits from April to June can also apply for support. Thus, an employee can receive the compensation for a maximum of three months instead of the current two. The final decision on amending the wage compensation measure is made by the Estonian government.

For the last two months the maximum amount of money the fund has compensated a worker for is €1,000.

Estonian employers: State must support employers who will not immediately recover when restrictions are lifted

The Unemployment Insurance Fund's wage support measure should continue at least for two more months, Arto Aas, manager of the Estonian Employers' Confederation, said.

A trilateral meeting of representatives of the government, the Estonian Employers' Confederation and the Trade Union Confederation was held on Tuesday. Topics discussed at the meeting included measures aimed at boosting the economy, the COVID-19 crisis action plan and the need for flexible organization of workload in the trade sector.

Aas said in a press release: "It is important that the state should also roll out a second wave of measures for mitigating the economic crisis in order to support the employers who won't be hit by the crisis until the second half of the year. This primarily concerns industrial enterprises and construction, but also trade and tourism -- none of which will immediately recover when restrictions are lifted."

He added: "The state is an important customer for the construction sector and each message by the government carries great weight. If public investments also continue during the economic downturn, jobs will be preserved and the inflow of tax revenue to the State Treasury will continue."

The Employers' Confederation made a proposal at the meeting to allow temporary employment contracts in which the employee's workload is expressed as a range on the condition that such an arrangement only applies to a certain share of the company's staff. The employer's organization said this would allow to employ a larger number of people.

"The issue of organization of working time stems from employee feedback. The crisis has highlighted the fact that authorization agreements are widely used, depriving employees working on the basis of these agreements from wage support as well as other social protection measures. The aim [of the proposal] is to reduce the number of such agreements," Kai Realo, chair of the council of the Employers' Confederation, said.

Realo noted that such an option would allow for employers to rapidly react to increased need for workforce, balance their workers' workload and prevent excessive overtime for full-time employees.

The idea would first be tested on schedule-based jobs in the commercial sector and subsequently expanded into other sectors if it proves successful.


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Editor: Anders Nõmm

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