As a result of the COVID-19 pandemic, the government has proposed to extend the temporary lay-off period to 52 weeks from 1 November 2020. The extension will help the business community financially during an uncertain time.
This decision implies that:
- the period during which employers are exempt from the wage obligation during the temporary lay-off period will be extended from 26 weeks to 52 weeks; and
- the period in which temporarily laid-off employees may be entitled to unemployment benefits will be extended from 26 weeks to 52 weeks.
According to the Obligation to Pay Wages during Temporary Redundancy Act, employers must pay lay-off pay and other remuneration for a given time after a lay-off has been decided (the employer's period). From 1 September 2020, this period is 10 days (for further details please see "COVID-19: change to period in which employers have payroll obligation when temporarily laying off employees"). After the employer-financed period, employers are exempt from the wage obligation for 26 weeks (the exemption period) under the current scheme. As mentioned, it has now been proposed to extend the exemption period to 52 weeks.
In addition, the government has proposed a second employer's period of five days after 30 weeks of temporary lay-off from 1 January 2021. Such period will apply to everyone who has been laid off for 30 weeks or more as per 1 January 2021. The purpose of the second period is to allow employers to assess whether it is necessary to keep their employees temporarily laid off, rather than to prevent such employees going to work for other companies that need workers.
The proposal will have budgetary consequences. Therefore, the government will submit a parliamentary bill with a proposal for a budget resolution to Parliament.
