The compensation, should it be approved, will be channeled via the Unemployment Insurance Fund (Töötukassa) and will be aimed at helping employers shoulder wage costs for December, particularly in the entertainment, hospitality and recreation sectors.

Social affairs minister Tanel Kiik (Center) said a decision on the measure, which will cost an estimated €16 million, will likely be made during a cabinet meeting, via remote link-up, Wednesday evening.

Up to €180,000 per employer

Peep Peterson, chair of the Unemployment Insurance Fund (Töötukassa) board, said that: "Many employers headed into Christmas in the dark, but the picture in the New Year will be calmer, as the Unemployment Insurance Fund has proposed compensation to employers in Harju County and Ida-Viru County, covering the restrictions period."

The proposal would allow up to €180,000 per employer, ERR reports, and would be due to employers in Harju and Ida-Viru counties only – the two regions hardest hit by the pandemic and the ensuing, tougher restrictions.

The compensation would be payable to businesses whose activitiy has significantly been disrupted by the restrictions, over the period December 28 to January 17.

Latest round of restrictions sees restaurants, bars, sports centers close

From Monday, December 28, entertainment facilities including bars, pubs and restaurants, sports facilities including spas and swimming pools, and cultural facilities like theaters and cinemas, have been closed in Tallinn amid rising coronavirus rates, and following similar measures imposed in Ida-Viru County earlier in the month.

The compensation would primarily cover labor costs, and would require staff to be listed in the employment registry as working in either of the two affected counties.

The labor costs will be based on the figure for November, and would be transferred to employers and earmarked for employee salary costs.

Terms and conditions apply

Conditions include a bar on making redundancies within a month of receiving the aid, and the absence of a current, non-deferred tax debt.

More details will be hammered out next week, assuming the government gives the go-ahead on the scheme, at an Unemployment Insurance Fund next week, ERR reports.

From April, a wage support scheme provided up to 70 percent of an employee's salary, or €1,000, whichever was lower, for firms whose activities were disrupted by the spring coronavirus wave.

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