Kiik: Unemployment fund to endorse €30 million wage support measure

A closed restaurant in Tallinn.
A closed restaurant in Tallinn. Source: Priit Mürk/ERR

The government and the Unemployment Insurance Fund have agreed on wage support measures amounting to approximately €30 million, Minister of Health and Labor Tanel Kiik (Center) said on Thursday.

Speaking at the government's press conference, the minister said the measure is to be made available to the sectors directly affected by the new restrictions, such as food service companies, spas, and the fields of sports and culture, as well as sectors affected indirectly, such tourism and retail.

Kiik said it is possible for the Unemployment Insurance Fund to provide up to €39 million towards the measures. The aim initially was to use half of that amount and leave the rest for the future, but since the restrictions have been toughened, the measure has become more expensive.

He added the measure may be applied beyond the month of March, but the fund's council said the money for this must be provided by the government. 

Kiik said that the fund will not tap into its other reserves to finance the measure as the reserves are meant for bridging its current operating shortfall. It is estimated that the costs of the Unemployment Insurance Fund will surpass income by €50 million to €70 million annually in the coming few years.  

Several criteria will apply to the companies that wish to qualify for the measure. The company must comply with the identifiers a code of the Classification of Economic Activities (EMTAK) and its revenue must have dropped at least 50 percent from the pre-crisis level.

The fund will finance, using its own funds, 60 percent of the pay of persons employed on the basis of an employment contract, but not more than 1,000 euros, in March. The employer meanwhile must pay the employee at least €200 in remuneration plus associated taxes. 

It will be forbidden for the recipients of the support to make employees covered by the measure redundant during the period of the payment of the support or two months after it.

The details and the size of the measures are expected to be endorsed at a meeting of the council of the Unemployment Insurance Fund on Thursday evening.


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Editor: Helen Wright

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